Trans-Pacific volumes and revenue up with OOIL acquisition, but stand-alone results reflect seasonal weakness.
Cosco Shipping Holdings (HKEX: 1919) reported first quarter net profit that was up sharply from a year ago thanks to its addition of the results from Orient Overseas (International) Lines.
The Chinese conglomerate with stakes in container shipping and terminals businesses, Cosco reported net profit of $102 million at current dollar-yuan exchange rates, nearly triple the level it reported a year earlier.
Excluding non-recurring items such as gains in the value of financial and held-for-sale assets and government subsidies, Cosco reported revenue of $80.6 million, up 260 percent from a year ago.
Total revenue came in at $5.2 billion, up 60 percent from a year ago.
Container shipping revenue was up 67 percent from a year ago to $4.6 billion.
Of that, revenue from Orient Overseas’ container line business represented $1.4 billion. Excluding the acquired revenue, Cosco’s container ship business saw a 14 percent gain from a year earlier.
Individually, Cosco saw a 3.7 percent gain in container volumes for the quarter, while Orient Overseas’ volumes were up 1.6 percent.
Cosco saw sharp gains in revenue and volumes from all of its different trade lanes with the addition of Orient Oversea’s business. Trans-Pacific revenue was up 76 percent to $1.36 billion.
But on a separate basis, Cosco reported a 3 percent gain in its trans-Pacific revenue and Orient Overseas a 5.6 percent gain.
Likewise, volume in the trans-Pacific fell in the first quarter due to seasonal weakness and pull-back from the tariff-related front loading of U.S. container imports. Cosco saw an 11 percent dip in trans-Pacific loadings while Orient Overseas saw a 3.6 percent fall in the quarter.
But Asia-to-Europe trades were a growth driver for the company during the quarter. On a stand-alone basis, Cosco saw Asia-Europe container volumes rise 11 percent while revenue of $750 million was up 21 percent. Cosco’s terminals subsidiary saw some of its best volume growth for the first quarter coming out of its European terminals, including the Piraeus Container Terminal.
At the end of the first quarter, Cosco’s fleet totaled 478 container vessels, with a total shipping capacity of 2.77 million twenty-foot equivalent units (TEU). It has nine orders for container vessels, representing a total of 159,421 TEU in capacity.