China Cosco Sinks into Red
Dragged by lackluster freight rates in the maritime transport market during the first half of 2016, China Cosco Holdings logged a 7.2 billion yuan ($1.07 billion) net loss for the January-June half, down from the year-earlier profit of 2 billion yuan, reports Nikkei Asian Review.
The shipping and logistics company 's sales climbed 3% on the year to 29.6 billion yuan.
COSCO’s fleet had 304 vessels with total capacity of 1.61 million TEUs as of June 30, representing an increase of 83.3% year-on-year, while it handled 7.4 billion TEUs during the period, an increase of 39.2% year-on-year.
Despite the slower growth of shipping capacity when compared with last year, significant improvement was made in the imbalance between supply and demand of the shipping sector.
The state shipping giant implemented business reform and restructuring in the first half of the year, in the face of challenging market conditions.
Two leading Chinese shipping groups merged in February to create China Cosco's current parent, China Cosco Shipping. Consolidating the two groups' containership and other operations helped boost revenue.
But flagging shipping demand led to stiff competition, and rates for containers between Asia and Europe fell to where they were during the 2008 global financial crisis. Efforts by China Cosco to cut shipping and fuel costs could not make up for the negative forces in the market.
