“Under current market conditions it is difficult not to see a loss, but we will continue to work towards a good result,” COSCO Chairman Ma Zehua told a media briefing in Hong Kong after the company reported its first-half results.
COSCO, the listed flagship of state-backed China Ocean Shipping (Group) Company, on Thursday reported a first-half loss of 2.28 billion yuan ($371.2 million), compared with a loss of 990 million yuan in the previous year.
The company, which oversees China’s largest dry bulk fleet, said it still expects weak demand, high costs and tight funding to feature heavily in the second-half. But Ma said overall he expects the market for the rest of the year to be better than the first six months.
The global shipping industry has been stuck in its longest slump in three decades after too many ships were ordered in the years before the global financial crisis, leaving a capacity glut that pulled down freight rates and hit carriers’ earnings.
But a slower influx of new vessels and uptick in global trade could push COSCO back to profit in 2015, analysts said before the results.
Iron ore, a key commodity transported by dry bulk carriers which is used in steel, was now at a reasonable price which could help China’s imports, Ma said.
He also said COSCO was open to international alliances with anyone depending on regulatory requirements, including its smaller state-owned rival China Shipping Group, without giving further details.
COSCO and China Shipping signed a strategic agreement to share resources in February. The company, and other carriers such as Denmark’s Maersk Line and Swiss firm Mediterranean Shipping Co have been entering alliances to pool ships in order to reduce costs and increase efficiencies. (Reporting by Clare Jim; Writing by Brenda Goh; Editing by Ryan Woo)
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