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Cosco Shipping back in black with US$205 million profit as sales soar 53pc

12:15:0312/09/2019

COSCO Shipping Holdings' reversed itself from a first half a loss of US$35.4 million last year into a profit of $205.8 million, drawn on revenues of $10.1 billion, up 53 per cent year on year.

The world's third largest containership company by capacity, COSCO Shipping said its good fortune was the result of the acquisition of Hong Kong's Orient Overseas Container Lines (OOCL).

Excluding OOCL results, COSCO reported revenue rising four per cent to $6.9 billion with profit of $93 million. Revenue per TEU rose 4.3 per cent to $882.16.

Overall volumes during the quarter reached 12.4 million TEU, up 40 per cent year on year, inclusive of OOCL. Without OOCL, Cosco volume came in at 9.1 million TEU, up two per cent year on year.

Other income, which includes subsidies, tripled from $358 million in 2018 to $1.03 billion in 2019, the company said.

Excluding OOCL results, COSCO reported revenue rising four per cent to $6.9 billion with profit of $93 million. Revenue per TEU rose 4.3 per cent to $882.16.

The US-China trade war's imposition of new tariffs on Chinese goods, and Europe's economic slowdown pushed demand for container shipping down to two per cent in the first half of 2019.

COSCO Shipping said the economy and trade 'faced relatively severe challenges and increased uncertainties, and the growth in demand for container shipping was slowing down' during the period.

The outlook for the remainder of 2019 is more of the same. It said demand in container shipping market will maintain a slow growth. But capacity will adjust lower thanks to the scrapping of older, less efficient vessels due to the impact of the International Maritime Organisation's low-sulphur fuel rules coming in 2020.

While US-China trade levels tumble, China's total trade volume with the countries along the 'Belt and Road' is expected to continue to grow rapidly', it said.

COSCO Shipping reported a fleet of 493 vessels, with the total shipping capacity of 2.9 million TEU, a five per cent increase as compared to the end of 2018. The company is a member of the OCEAN Alliance along with CMA CGM and Evergreen Marine.

The company also took delivery of eight containerships accounting 144,000 TEU in the first half. The ships are serving northwest Europe, US east coast and the Middle East.
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