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Cosco Holdings sees profit plunge 46%

Cosco Holdings sees profit plunge 46%
China Cosco Holdings Company has reported a drop in net profit as the company continues to increase its revenue and reduce expenses amid the weak shipping market.

Profit for 2014 fell 46.2% to RMB1.55bn ($249.52m) compared to the gain of RMB2.88bn in 2013, Hong Kong-listed Cosco Holdings said.

Revenue, however, inched up to RMB66.9bn from RMB66.14bn a year earlier due to higher contributions from its container shipping business, but partially offset by lower revenue from the dry bulk shipping business.

“In 2014, the international shipping sector still did not see substantial improvement of imbalance of supply and demand. Under such difficult conditions, the company had taken various measures to improve its overall performance by increasing revenue and reducing expenses,” Cosco Holdings said.

On the outlook for the container shipping sector, the company pointed out that although demand will continue to recover this year, the capacity oversupply pressure will not ease.

The dry bulk shipping market, on the other hand, will see “severe” market condition this year also due to the oversupply situation.

But in light of the slow recovery of economic fundamentals and new normal development of the shipping industry, the global port industry is expected to experience stable growth, but the growth rate may slow down, it added.