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China COSCO Cuts Q3 Losses, “Confident of Turning a Profit” in 2013

Reuters
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October 30, 2013

reuters_logo1HONG KONG, Oct 30 (Reuters) – China’s largest bulk shipper, China COSCO Holdings Co Ltd , cut its third-quarter loss versus year-ago levels, helped by assets disposals and a rebound in the global dry bulk market.

The company, which has been hit by a weakening global economy and a supply glut of ships since the beginning of 2011, appears to be on track to return to black this year, though analysts note uncertainty due to lingering oversupply.

China COSCO on Wednesday reported a net loss of 1.04 billion yuan ($171 million)in July-September, according to Reuters’ calculations, narrowing from a 1.5 billion yuan shortfall a year ago.

For the first nine months, COSCO posted a net loss of 2 billion yuan, smaller than the 6.4 billion yuan loss during the same period in 2012, according to a filing to the Shanghai stock exchange.

The company, controlled by state-owned China Ocean Shipping (Group) Company, has posted losses for two consecutive years, and a third year would trigger a delisting from the Shanghai stock exchange.

COSCO Chairman Ma Zehua said in August that, with the global dry bulk market improving in the second half, the company is confident of turning a profit for the full year of 2013 after a narrower first-half net loss.

COSCO has sold its logistics business, stakes in a container manufacturer and office properties so far this year to try to return to profitability.

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry commodities, rose to its highest in almost two years in early October, but analysts said the sharp rebound was due to seasonality factors and that oversupply issues still exist in the industry.

Shares of China COSCO, which controls port operator and container leasing firm COSCO Pacific Ltd, are down 1.6 percent this year, lagging a 2.9 percent rise in the blue chip Hang Seng Index. ($1 = 6.0902 Chinese yuan) (Reporting By Yimou Lee; editing by Stephen Nisbet)

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