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China Cosco Holdings hit by deeper loss of $692m in Q1

China Cosco Holdings hit by deeper loss of $692m in Q1
China Cosco Holdings Company has been hit by a deeper loss in the first quarter of 2016 due mainly to a loss on disposal of its bulk shipping division to its parent firm following the merger with China Shipping Group.

Net loss for the quarter ended 31 March 2016 was registered at RMB4.48bn ($691.87m), widening from the deficit of RMB1.01bn in the same period of 2015.

During the first quarter, China Cosco Holdings disposed of 100% equity interests in China Cosco Bulk Shipping (Group) Co and 100% equity interests in Florens Container Holdings. The disposal resulted in a loss of RMB2.43bn being recognised for the first quarter.

The container shipping business, on the other hand, saw an increase of 14.8% in shipping volume due to the absorption of the fleet from China Shipping Container Lines (CSCL) under China Shipping Group, but recorded a loss of RMB1.38bn due to the sluggish market.

The Hong Kong- and Shanghai-listed company, now the container shipping arm of the merged China Cosco Shipping Corp (Coscocs), posted a first quarter revenue of RMB14.61bn, down 19.6% from RMB18.17bn in the year-ago period.

“As the sluggish growth in global container transportation demand, excessive shipping capacity and stagnant shipping market show no signs of improvement, it is expected that the accumulated net profit of the group from the beginning of the year to the end of the next year reporting period will be negative,” China Cosco Holdings said.