China Cosco posts loss as rates slump

China Cosco Holdings, flagship of the country's No.1 shipping conglomerate, posted a net loss of US$77.3 million in the first quarter as shipping rates slumped amid a supply glut.


China Cosco, which operates the world's largest bulk cargo fleet and is the No 5 container shipper globally by capacity, returned to the red after a profitable 2010, but the loss was below an average analysts forecast for a $95 million loss, reported Reuters.


This compared with a net profit of $135.95 million in the same period last year.


Overcapacity, especially in the dry bulk market, knocked the company's first-quarter revenue down six percent to $2.53 billion, although China's imports and exports rose 33 percent and 26.5 percent, respectively in the January-March quarter.


The Baltic Exchange's main Baltic Dry Index, which tracks rates to ship dry commodities such as grains and iron ore, hit a two-year low of 1,172 in February.


China Cosco said its container shipping volume rose 12 percent in the first three months of 2011 but only added 3.8 percent to revenue.


The appreciation of the Chinese yuan and fuel price increases also ate into the company's margins.


Its container leasing and terminal operating arm, Cosco Pacific, reported a first-quarter net profit of $109 million, down 18 percent.
(Source:http://www.cargonewsasia.com)