China Cosco Holdings, the Hong Kong and Shanghai-listed group parent of China Ocean Shipping, continued its run of deep losses in the first half of the year with a loss attributable to equity holders of Rmb4.9bn (US$766.8m).
The loss for the quarter ended June 30 stood at Rmb2.2bn, slightly better than the Rmb2.7bn lost in the first quarter.
China Cosco Holdings, the Hong Kong and Shanghai-listed group parent of China Ocean Shipping, continued its run of deep losses in the first half of the year with a loss attributable to equity holders of Rmb4.9bn (US$766.8m).
The loss for the quarter ended June 30 stood at Rmb2.2bn, slightly better than the Rmb2.7bn lost in the first quarter.
However, the results were worse than expected. “Based on results previously announced by peers, the quarter-on-quarter improvement was disappointing given the larger second quarter 2012 recovery seen in other container shipping operations,” said Jon Windham, an analyst for Barclays Capital, in a report.
A deep loss in the container unit of Rmb1.3bn in the first half versus Rmb947m last year indicated that China Cosco had not reaped the full benefits of the rates restorations since March enjoyed by other container lines.
Analysts said that Cosco was very likely profitable or near-profitable in this unit in the second quarter, but that deep losses in the first weighed down the results. Cosco did not break out quarter-on-quarter figures for its business segments in its interim statement.
“Hindered by the slow recovery of the global economy and the spread of the European debt crisis, the global demand for container shipping was moderate in the first half of 2012,” the company said in its half-yearly report.
China Cosco’s troubled dry bulk unit continued its cash drain on the company, losing Rmb 3.4bn in the first half, compared with a loss of Rmb2.8bn in the first half of last year.
“Cosco is on track to losing another Rmb10bn this year,” said an analyst in Hong Kong.
The losses came on revenue of Rmb 42.5bn ($6.8bn) in the same period. Revenue was up 1.3% on the first half of 2011, but the loss per share for the first half of 2012 was 76.7% higher than first half of 2011. Costs of services and inventories sold rose to Rmb44.5bn compared with Rmb42.7bn a year earlier.
Revenues for the container segment improved year-on-year in the first half, an indicator of the degree to which costs were eating into boxline earnings. For China Cosco’s transpacific routes, revenues were up 17% to Rmb6.9bn in the period compared with last year. Asia-Europe revenues were up 22% to Rmb6bn.
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