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CSCL plunges into $449m loss in 2015

CSCL plunges into $449m loss in 2015
The continuing global economic weakness is still weighing on the lines with China Shipping Container Lines (CSCL) falling into a RMB2.94bn ($448.5m) loss in 2015.

This compared to a RMB1.03bn profit the year before, and revenues also fell 12% to RMB31.83bn from RMB36.08bn previously, the company said.

Volumes fell 3.5% to 7.8m teu. Both international and domestic volumes were affected, falling 3.6% and 3.4% respectively. While the fall in international trade lanes was blamed on the "significant slowdown in global economic recovery and weakened demand for container transport", the drop in domestic volumes was "primarily due to limited shipping space utilization rate and tendency of saturation of domestic market which in turn restrained market growth", CSCL said.

In addition the results were even harder hit by the plunge in freight rates. "Decrease in freight rates was primarily due to a slowdown in global economic growth, a sluggish international shipping market and an imbalance in supply and demand in 2015, which led to substantial drop in overall freight rate," CSCL explained, echoing all the lines that had reported before it.

Looking ahead, as a precursor to its possible future direction, CSCL noted the opportunities in China's relatively underdeveloped ship financing sector.

"CSCL will take good advantage of the opportunities arising from China’s initiatives to accelerate development of its finance leasing and financial leasing industries, and set up an integrated financial services platform on the basis of its shipping business, leveraging on its deep understanding and experience in the shipping industry accrued over decades," the management said.

Further elaborating, it concluded that "as a shipping finance platform, CSCL is to integrate premium resources and take advantage of the group’s numerous strengths, such as its background, to realize integration of its shipping and finance business, and promote the finance business with its shipping business as well as the operating efficiency and profit growth."