7.6 billion dollars in three months!

7.6 billion dollars in three months!

What put a token in the jukebox. As the debate over corporate superprofits rages on, French shipowner CMA CGM announced on Friday that it posted a net profit of $7.6 billion in the second quarter, more than times more than last year, while that turnover jumped 57% over one year, to 19.48 billion dollars. The performance is stratospheric. On average each day, the shipowner managed by Rodolphe Saadé, generates a net profit of 84.4 million dollars. Since the beginning of the year, profits have flirted with 15 billion dollars, almost as much as during the whole of last year (17.9 billion). However, the group reports a deterioration in the outlook for world trade due to inflation and particularly the rise in energy prices. CMA CGM is benefiting from soaring sea freight prices due to the disorganization of supply chains since the end of the health crisis.

In six months, the Marseille-based group will have garnered 14.8 billion dollars, after a record of 17.9 billion over the whole of 2021. This has earned it a place, alongside energy companies, among the targets of a possible tax on “superprofits”, demanded by the left opposition in France.

Debate on superprofits

Prime Minister Élisabeth Borne indicated last week that she did not close the door to such taxation, but that she preferred that each company which can “lower prices for the consumer and give purchasing power to its employees “.

CMA CGM has made several gestures in recent months, including a further reduction in its rates on August 1 with a reduction in its freight rates of 750 euros per 40-foot container to mainland France and the Overseas Territories, i.e. up to 25%. of its prices, instead of the 500 euros provided for previously. The company had also announced a reduction of 100 euros per 40-foot container for all French exports. She did not reveal a new measure on Friday.

Already suffering from “congestion affecting port terminals and land logistics chains, which result in longer transit times for ships”, the group has seen its volumes transported (measured in TEU, “twenty-foot equivalent”, reference unit sector) fell 1.3% year on year in the second quarter, to 5.6 million, he said in a statement.

This announcement comes as the debate on the taxation of “superprofits” has taken an unexpected turn in recent days, the executive finding itself accused of being itself a “superprofiteur” through tax revenues greater than its expectations.

Invited on Friday on BFM TV / RMC, the Minister of Public Accounts Gabriel Attal once again had to deny the existence of a “kitty” within the State, while the accusations of excessive enrichment weighed so far rather on large companies such as TotalEnergies or CMA-CGM.

“There are additional (tax) revenues but we spend a lot more to protect, to support the French”, he thus hammered.

The State, a superprofiter?

With high inflation in recent months – accelerated by the conflict between Russia and Ukraine – and the good resistance of employment and growth in France, tax receipts are in fact very dynamic. In a press release on the state’s budgetary situation, the Ministry of Finance also indicated on Friday that at the end of July 2022, “net tax revenue (established) at 172.5 billion euros against 144, 1 billion at the end of July 2021”.

Income related to corporation tax increased by nearly 16 billion euros over one year, and those from VAT by 7.7 billion. What accredit the thesis of the boss of the Medef Geoffroy Roux de Bézieux, who had estimated Monday that “the biggest superprofiter is the State”? Not for Gabriel Attal, who takes the example of VAT on gasoline.

“With the increase in gasoline prices”, the State collected an additional VAT of “3 to 4 billion euros”. But “we spent 7 billion euros for the fuel rebate”, argued the Minister of Public Accounts.

“The state does not get rich in the situation, on the contrary”, he continued, in line with comments already made by Elisabeth Borne. Monday, the Prime Minister had replied to the president of Medef that “no, there (was) no superprofits on the side of the State”.

Despite these denials, over the past week the government has had to face a perilous backlash on an issue that has plagued it since this summer. Originally, it was indeed a few large companies with exceptional financial results that were in the sights of the left opposition. But rather than taxing them as demanded by the opposition, the government encouraged them to lower their tariffs, an appeal heard by TotalEnergies and CMA CGM.

“A tax has never improved the lives of our compatriots. Our compatriots need money in their pocket, not in the pockets of the State”, insisted the Minister of Economy Bruno Le Maire before Parliament in July. Returning from the summer break, his line has not changed and the number 2 of the government is now making foot calls to the banking and insurance sectors to reduce bank charges or insurance premiums. But supporters of a tax have not given up.

“We do not have the impression that the tax code is able to distribute fairly (profits), especially since the Covid”, judged Esther Duflo on Friday on France Inter. So “the tax on superprofits is a really good idea,” continued the co-winner of the 2019 Nobel Prize in Economics.

At Matignon, the tone has become slightly more conciliatory about such taxation.

“I think that companies will show responsibility” by acting for the purchasing power of the French, estimated Thursday Elisabeth Borne. But “if some do not do it, we are not closing the door” to an exceptional taxation of superprofits, she said.

The question promises to come back in the debates on the draft 2023 budget, which the government must present at the end of the month. Deputies from the presidential camp are already pleading for a compromise, in the form of a fund to finance the energy transition fed by the “superprofits” of companies. An “interesting” idea for Bruno Le Maire. It remains to sell it to the opposition, determined to negotiate their votes dearly while the government only has a relative majority in the National Assembly.