Cosco Shipping Holdings to Post 2016 Loss
Cosco Shipping Holdings (CSH)has announced that its profit for 2016 will be below that of 2015, reports Reuters.
The container shipping arm of state-owned China Cosco Shipping Corp expects to post a net loss of 9.9 billion yuan ($1.44 billion) for 2016, citing the impact of asset disposal and a weak freight market.
On some trade lanes, including the high-volume route between Asia and Europe, average revenues per TEU in 2016 were at record lows.
Cosco said that freight rates began to recover in the fourth quarter which likely helped it to a 700 million yuan fourth-quarter profit before interest and tax.
The forecast full-year loss would be Cosco Shipping’s weakest annual performance since 2011 after the firm began restructuring last year in response to a prolonged market downturn. In 2015, net profit was 283 million yuan.
Cosco also claimed that benefits were coming about as a result of its extensive restructuring programme. This involved the disposal of its dry bulk shipping business and the merger of its Cosco Container Lines activities with those of China Shipping Group Co.
A spokesman said: “The Board considers that the decommissioning of vessels is conducive to enhancing the overall operational competitiveness of the fleet and is in the best interests of the company and its shareholders.”
