|
China Cosco Holdings Co. posted a 22 percent drop in earnings in 2015, while China Shipping Container Lines Co. swung to a loss as overcapacity of vessels led to lower rates.
Net income for China Cosco fell to $43.8 million in 2015, from $56 million in 2014, the company said in a statement to the Hong Kong stock exchange Wednesday.
China Shipping Container Lines Co. posted a net loss of $448 million last year, compared with a profit of $160 million in 2014, the nation's second-biggest container shipping company said in a separate statement Wednesday. In January, China Shipping had forecast a loss of $433 million for 2015.
Those results are the companies' last in their old, separate identities. China's state-owned Assets Supervision and Administration Commission announced approval in December for the reorganization of China Ocean Shipping Group and China Shipping Group, extending efforts to shrink industries plagued by overcapacity while creating globally competitive businesses. The announcement came days after CMA CGM, the world's third-biggest container shipping company, offered to buy Singapore's Neptune Orient Lines Ltd. for $2.5 billion.
"At the current shipping rate, most of the liners are losing money," Um Kyung A, an analyst at Shinyoung Securities Co. in Seoul, said before the earnings
were released. He said the situation worsened after
oil prices fell and cut shipping lines' expenses,
|
reducing the urgency for them to continue efforts to trim capacity.
Under the new structure, China Cosco operates container ships and China Shipping is a leasing and financing company for vessels and boxes. Cosco Pacific Ltd. holds wharf assets held by China Shipping to operate the combined company's terminals globally. China Shipping Development Co. will be the focal point for oil- and gas-transportation business. The combined Chinese company has 7.4 percent of the global container shipping market, the largest share among Asian operators, according to Alphaliner.
China Cosco moved 4.1 percent more TEUs last year, while China Shipping carried 3.5 percent fewer boxes. China Cosco's fuel expenses -- a large part of container shipping companies' costs -- fell 36 percent last year as the price of Brent crude dropped 35 percent.
Spot prices per-TEU to Europe from Asia fell to $247 in the week ended March 25, from $1,149 at the end of 2014, according to the Shanghai Shipping Exchange. A week earlier, they fell to $205, the lowest level since the exchange started providing data in October 2009. Levies to the U.S. West Coast dropped to $748 per-FEU, from $2,125 at the end of 2014. The two routes are the busiest trade lanes.
For more of the Bloomberg story: www.bloomberg.com
|
