Cosco says first half losses to narrow

Cosco China has warned that it is expected to post a loss for the first half ended 30 June 2013 based on preliminary estimates. However, Cosco expects that the loss will be reduced by approximately 70% to 85% compared to the same period last year.

The loss in the previous corresponding period amounted to RMB4.87bn. For the full-year Cosco had posted a loss of RMB9.56bn.

Cosco believes the loss "is primarily due to the imbalance between supply and demand in the international shipping market," the group said in a stock market release. It pointed out that with the container and dry bulk shipping markets remaining weak, freight rates had also dropped compared to the same period last year and remained at low levels. However, asset sales and returning chartered-in tonnage has helped to reduce losses in the first half despite the poor shipping market.

Cosco added that by selling stakes in Cosco Logistics Co., Ltd. and Cosco Container Industries Limited as well as reducing the
size of dry bulk vessel charters and expenses, it has reduced the net loss significantly compared to the same period last year.

Posted 31 July 2013

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Vincent Wee

Asia Editor, Seatrade Maritime News

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