Compagnie Maritime Belge (CMB)

Compagnie Maritime Belge (CMB) is a diversified Belgian shipping and logistics group, but thinking of it as just another shipping company would be like calling a smartphone just a phone. At its heart, CMB is a holding company controlled by the influential Saverys family, with a rich history dating back to 1895. While its traditional businesses include dry bulk shipping (through its Bocimar division) and specialized container shipping (Delphis), what makes CMB truly fascinating for today's investor is its bold pivot towards the future of energy. Through its CMB.TECH division, the company is pioneering the development of hydrogen and ammonia-powered engines, aiming to decarbonize not just its own fleet but the entire heavy industry and maritime sector. This forward-looking strategy, combined with the family's disciplined capital allocation, makes CMB a unique blend of old-world industrial heritage and new-world green technology. It’s a classic example of a business that requires investors to look beyond current earnings and appreciate the long-term vision being built.

CMB's operations are a mix of traditional shipping and forward-looking technology. Understanding these different parts is key to appreciating the company's full value.

• Bocimar: This is CMB's dry bulk division, one of the world's major players in the sector. These ships are the workhorses of the global economy, transporting raw materials like iron ore, coal, and grains. The performance of this segment is highly tied to global industrial production and trade.
• Delphis: This segment focuses on container shipping, but with a twist. It operates a fleet of specialized container vessels, often leasing them to larger shipping lines.
• ASL Aviation Holdings: Extending its reach from sea to sky, CMB holds a majority stake in this private airline group, which provides cargo and passenger services worldwide for major express integrators like DHL and FedEx.
• CMB.TECH: This is arguably the most exciting part of the group. CMB.TECH is the company's innovation engine, dedicated to creating engines and technologies that run on hydrogen and ammonia. This isn't a theoretical research project; they are actively building and operating hydrogen-powered ferries, trucks, and ship engines, positioning CMB as a leader in the green energy transition for heavy-duty applications.

To understand CMB, you must understand the Saverys family. Their long-term control provides a strategic stability that is rare in publicly traded companies.

The Saverys family's stewardship is a core tenet of the CMB story. They are a classic example of an owner-operated business, where the majority shareholders are also deeply involved in the management and strategic direction. For value investing purists, this alignment of interests between management and shareholders is a huge plus, as decisions are often made with a multi-generational perspective rather than to please the market's short-term whims.

A recent, high-profile chapter in CMB's history was its battle for control of the crude oil tanker giant, Euronav. The conflict pitted the Saverys family against shipping magnate John Fredriksen. The core of the disagreement was strategic: the Saverys family wanted to merge Euronav with their own operations and steer the combined entity towards diversification and decarbonization. Fredriksen, on the other hand, wanted to create a pure-play crude tanker behemoth by merging Euronav with his company, Frontline. This saga was a masterclass in strategic maneuvering and activist investing. Ultimately, the Saverys family prevailed, taking full control of Euronav in 2023 and setting it on a new course aligned with CMB's greener, more diversified vision.

Analyzing CMB is a fascinating exercise that goes beyond a simple look at its balance sheet. It requires an appreciation for its structure, its industry, and its ambitious future.

1. Cyclical Play: The shipping industry is a notoriously cyclical industry. Freight rates can soar during economic booms and plummet during downturns. For savvy investors, this volatility can create opportunities to buy shares at a significant discount during downcycles when pessimism is at its peak.
2. Holding Company Discount: CMB is often valued using a Sum-of-the-Parts (SOTP) valuation. This involves estimating the value of each business segment (Bocimar, Delphis, Euronav, etc.) and adding them up. Often, the market values a holding company at less than its SOTP, a phenomenon known as a “holding company discount.” An investor's task is to determine if this discount to the company's true net asset value (NAV) is justified.
3. The “Hidden” Tech Company: The market primarily sees CMB as a shipping company. However, the embedded CMB.TECH division could be a source of enormous future value. If its green hydrogen and ammonia technology gains widespread adoption, it could become the company's primary growth driver, giving it a powerful and durable competitive advantage.

1. Industry Volatility: The cyclical nature of shipping is a double-edged sword. A global recession or a slump in trade can severely impact CMB's profitability.
2. Capital Intensity: Shipping is a highly capital-intensive business. Buying and maintaining a modern fleet of ships requires vast sums of money, which can be a drag on returns if not managed wisely.
3. Geopolitical Headwinds: As a global trade operator, CMB is directly exposed to geopolitical risk. Trade wars, international conflicts, and sanctions can disrupt shipping routes and demand, creating significant operational and financial challenges.