China COSCO Holdings Co. Ltd., which now includes the combined operations of China Shipping Container Lines Co., reported losses in both its container shipping and dry bulk operations during the first quarter as rates in both segments plummeted.
China COSCO Holdings Co. Ltd., which now includes the combined operations of China Shipping Container Lines Co. (CSCL), reported a loss attributable to equity holders in the company of 4.48 billion Chinese yuan renminbi (U.S. $692 million at today’s exchange rate) in the first quarter of 2016, compared with a loss of 1 billion yuan in the same 2015 period.
Operating income stood at 14.6 billion yuan for the first quarter of 2016, down 19.8 percent from 18.2 billion yuan in the first quarter of 2015.
The company attributed the increased loss to a net loss of 1.4 billion yuan in container shipping; a net loss of 2.4 yuan on the disposal of its COSCO Bulk Shipping Group and Florens Container Holdings, a container leasing business; and a loss of 762 million in the dry shipping business. China COSCO recorded losses in bulk shipping in both January and February before disposing of the business on Feb. 29.
Overall, the ocean carrier handled 3,024,034 TEUs in the first three months of 2016, 14.8 percent more containers than it did in the first quarter of 2015. China COSCO chartered and operated the container vessels and containers owned or operated by CSCL beginning on March 1, so the merger of the two container business was not fully reflected in the first quarter results.
First quarter revenues from container operations in the first quarter fell 9 percent to 10 billion yuan compared with the same 2015 period. The company said it saw the steepest decline in revenues in the transpacific trade, where revenues dropped 19 percent to 3.4 billion yuan, even as volumes rose 2.9 percent to 462,458 TEUs.
China COSCO noted that the average index value on the China Containerized Freight Index, which measures container shipping rates to and from China, for the first quarter of 2016 was 739 points, 30 percent lower than in the first quarter of 2015.
The company said its container terminal business handled 22.2 million containers for the quarter, a 2.9 percent increase from the same quarter last year.
COSCO Pacific, which reports its results in dollars, posted a profit of about $115 million in the first quarter of 2016 (including $59 million on the disposal of its interest in Florens and $7.5 million from Florens before it was was sold) compared to $88 million in the same period a year earlier.
Revenues in the terminal business were relatively flat at $129 million compared with $132 million in the first quarter of 2015.
China COSCO posts $692m loss in Q1 2016
