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Cosco loses $101 million

Cosco loses $101 million
China Cosco, the listed arm of Chinese largest shipping company, China Ocean Shipping (Group), stayed in the red in the third quarter of the year, dragged down by container shipping.

China Cosco, the listed arm of Chinese largest shipping company, China Ocean Shipping (Group), stayed in the red in the third quarter of the year, dragged down by container shipping.

China Cosco, the listed arm of Chinese largest shipping company, China Ocean Shipping (Group), stayed in the red in the third quarter of the year, dragged down by container shipping.

China Cosco reported a third quarter net loss of Yuan690.7m ($101m), as revenues slumped to Yuan15.8bn, a 52.4% drop compared to the same period a year earlier.

The company"s container shipping business was particularly hard hit, with revenues in the third quarter falling to Yuan6.2bn down 39.5% on the third quarter last year.

The company posted a 6.5% decrease in container shipping volume to 1.4m teu in the third quarter this year. For the first three quarters, container shipping volumes by 16.7% to 3.8m teu, compared with 4.5m teu a year earlier.

During the third quarter, Asia-Europe services were hard hit and volumes declined as much as 15.6% to 366,807 teu. Intra-Asia services also saw a decline to 319,524 teu, while the transpacific services decreased 4.5% to 320,501 teu.

For China Cosco"s dry bulk shipping businesses, the volume of cargo the company"s fleet carried edged up 0.5% to 72.5m tonnes in the third quarter.

On the terminal business front, the container volume the group"s terminals handled dropped 4.2% to 11.6m teu in the third quarter. That resulted in a 7% fall to 31.8m teu in container throughput for the first nine months of the year.

The company said it expected the whole-year net profit would be negative because of the global economic crisis.

Cash Asset Management director Patrick Yiu pointed out that the loss of China Cosco had significantly narrowed from Yuan3.3bn in the first quarter to Yuan690.7m in the third quarter.

?China Cosco might be able to turn its profit to the black in the fourth quarter,? he said. ?The China containerised freight index has rebounded from about 810 at the end of August to about 960 at the end of October. The rebound reflects that the worst period for Chinese export has been over. China Cosco container division is expected to be boosted by the resurgence of the country"s export.?

Kenny Tang, head of research at Redford Securities, echoed Mr Yiu"s view that the company"s container business had already bottomed out.

?The company has increased of freight rate for the services such as Mediterranean to Far East. It will enhance the profitability of its box transportation in the fourth quarter.?

However, Mr Tang said China Cosco would see a substantial loss as a whole this year because of the poor performance in the first half.

www.TurkishMaritime.com.tr

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