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Profit declines 43% at COSCO
By Ding Yining | April 24, 2009, Friday | Print Edition
SHARES of China COSCO Holdings Co fell yesterday after the world's largest operator of dry-bulk ships said profit dropped 43 percent in the past year.
Its shares fell 1.23 percent yesterday in Shanghai to close at 12.88 yuan.
Profit fell to 10.8 billion yuan (US$1.58 billion), based on domestic accounting standards, the firm said in a statement to the Shanghai Stock Exchange on Wednesday. Revenues rose 17.2 percent to 115 billion yuan.
The company carried 5.79 million TEUs (20-foot equivalent units) in the past year, up 1.5 percent from the previous year, contributing 39 billion yuan of revenue.
The company said there remains a critical situation in Far East-to-America routes, as well as those between Asia and Europe, as demand for shipping will continue to slow as a result of the global economic crisis.
It set a target to transport 5.23 million TEUs this year.
The company shipped 293.1 million tons of dry-bulk cargo last year, up 10.7 percent from the previous year. Demand for iron ore and coal will remain low while new boat delivery this year will be high, adding to the unbalance of supply and demand.
The company said it is in talks to delay or cancel orders for new vessels as the global recession hammers demand for shipments of coal, grain and iron ore.
It is also planning to cut capital spending to 14.4 billion yuan this year, from 20.3 billion yuan last year, the company said.
Meanwhile, China Shipping Container Lines Co, the country's second-largest carrier of sea-cargo boxes, said it may face losses in the first quarter.
The company's container business shrank as world trade retreated and freight rates collapsed, according to a preliminary earnings release that came late Wednesday.
The stock retreated 1.64 percent to 4.21 yuan yesterday.