CIMC hit by loss in first nine months on botched acquisition deal

China International Marine Containers (CIMC) sank to a loss in the first nine months of 2016 despite managing a profit during the third quarter, due mainly to provision made to a botched acquisition deal.

Net loss for the nine months ended 30 September was reported at RMB189.6m ($28m) as against the profit of RMB1.73bn in the same period of 2015. For the third quarter, however, Hong Kong-listed CIMC posted a profit of RMB188.4m, down 8.7% year-on-year.

CIMC said the loss was due to “the termination of the acquisition of Sinopacific Offshore & Engineering (SOE) and the borrowings and guarantees to it by a non-wholly owned subsidiary of the group, CIMC Enric Holdings, and the significant provision made by CIMC Enric for such termination in the interm period of 2016, from January to September 2016”.

Revenue for the group for the first nine months came up to RMB34.98bn, a 22.7% decline from RMB45.27bn in the previous corresponding period.

“In the first three quarters of 2016, the supply and demand of global shipping trade market was imbalanced; low shipping prices expanded the scales of loss in the shipping industry; and the demand for containers declined significantly as compared with previous years,” CIMC stated.

The group realised total sales of dry containers of 419,000 teu, representing a year-on-year decrease of 57.5%, and generated total sales of reefer containers of 45,300 teu, down 64.2%.

Posted 28 October 2016

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Lee Hong Liang

Asia Correspondent

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