[070515.EN.SEA] China Cosco Quells CSCL Merger Talk - Posts Q1 Loss of US$166 Million

CHINA Cosco Holdings reported a first quarter loss of US$166 million - a 45 per cent improvement on the loss reported during the same period last year - just hours after being forced to deny reports for a second time that the carrier would be merged with China Shipping Container Lines (CSCL).

China's state media reported on April 16 that Beijing was planning to consolidate several of its state-owned giants that would include the merger of China Cosco, CSCL, Sinotrans and China Merchants Group. This increased the share price and forced the first denial from China Cosco, reported Newark's Journal of Commerce.

"Up to now, neither the company's controlling shareholder nor the company has received any information, in written or oral form, related to the above rumour from any government departments. Neither the company's controlling shareholder nor the company has expressed any such intention to any departments or enterprises," China Cosco told Hong Kong and Shanghai shareholders on April 29.

For the first quarter that ended on March 31, the container volume handled by China Cosco's fleet of 183 vessels reached 2.34 million TEU, an increase of 12.8 per cent year on year.

Total throughput of the group's container terminal business rose by 6.6 per cent compared to the first quarter of last year to 16.47 TEU. The Bohai Rim terminals handled the largest share of the group's throughput, although they posted relatively flat growth of 1.1 per cent in the first quarter year on year. Operating revenue grew 4.4 per cent to $2.3 billion.

The group's Pearl River Delta terminals handled 4.4 million TEU in the first three months of the year, up 12.7 per cent, while 2.5 million boxes flowed through the Yangtze River ports, up 4.2 per cent year on year.

China government subsidies for scrapping 22 old and inefficient vessels saw the carrier gain $9 million during the first quarter, although the disassembly and decommissioning of the vessels saw the shipping line shouldering a non-operating expense of $55 million.

Source : HKSG.