Cosco Pacific agreed to sell a 2bn yuan ($293m) stake in a logistics venture after first-half profit dropped amid slumping world trade.
Cosco Pacific, Asia's third-largest container-terminal operator, agreed to sell a 2bn yuan ($293m) stake in a logistics venture after first-half profit dropped amid slumping world trade.
The company expects to report a $102.5m pretax gain from selling its entire 49% stake in Cosco Logistics it said in a Hong Kong stock exchange statement late yesterday. Parent China Cosco Holdings, which already owns the rest of the venture, will buy the stake.
Cosco Pacific reported a 32% decline in first-half profit as recessions in the U.S. and Europe damped shipments of toys, furniture and other goods. Hutchison Port Holdings Ltd., the world's largest container-terminal operator, posted its biggest profit decline in at least eight years because of the trade slump.
"How long it will take for a rebound remains to be seen," said Jimmy Lam, a Hong Kong-based analyst at BOC International Holdings Ltd. "Margins at port businesses and container-leasing have shrunk because of weak demand."
Cosco Pacific doesn't plan any further disposals this year, Managing Director Xu Minjie said at a Hong Kong press conference today. The second half may be better than first half as Chinese, European and U.S. markets are recovering, he added.
First-half net income fell to $104.5m from $153.2m a year earlier, Cosco Pacific said in a separate stock exchange filing. Container traffic declined 8.5% to 20.2m teu.