[040912.EN.SEA] CSCL Posts First Half Loss Of US$203 Million Despite 15pc More Box Volume

CHINA Shipping Container Lines (CSCL) has announced a first half net loss of CNY1.2 billion (US$203 million), far worse than the net loss of CNY630.3 million over the same period last year.

The results indicate that recovery in the second quarter, which produced a net profit of CNY173 million, was far off the mark to wipe out the first quarter loss of CNY1.4 billion.

First half revenue amounted to CNY15.3 billion, up 9.6 per cent year on year.

The company said the "complicated" market situation that affected the results: "At the beginning of 2012, the shipping market extended the sluggish trend of 2011. Demand from the European and US economies remained weak, while the container transportation capacity expanded continuously. Fuel prices also remained persistently high, creating immense pressure on shipping companies".

The loss comes despite the container shipping unit achieving a 15.2 per cent volume increase to 3.96 million TEU in the first half of the year, driven by 23 per cent growth in Asia-Pacific trade lanes to 766,754 TEU; 27.4 per cent increase in Europe/Mediterranean trade lanes to 678,979 TEU; China domestic volumes up 12.3 per cent to 1,841,693 TEU while Pacific volumes up 6.7 per cent to 637,226 TEU.

The company said during the first half, the group' s average freight rate per TEU for international trade lanes dropped by three per cent to CNY5,585 compared with the first half of 2011. Revenue per TEU for domestic trade lanes was down 10.1 per cent to CNY1,570.

The company'earnings from its container shipping operations and container terminal unit account for 98.7 per cent and 1.3 per cent, respectively, of its revenue.

Looking ahead, the company said: "With the continued increase in capacity, the capacity will remain greater than demand for an extended period. The container shipping market will have to endure factors such as volatile oil prices and competition as challenges and opportunities coexist."

Since the beginning of 2011, the shipping line has taken delivery of eight 14,000-TEU newbuildings plus four 4,700-TEU newbuildings.

By comparison China Cosco posted a second half net loss of $647 million, compared to the $284 million loss recorded a year earlier. Revenue fell 1.3 per cent year-on-year to $6.7 billion, while operating losses deepened from a loss of $410 million in the first half of last year to $584 million this year. This led to a negative return on sales of 9.6 per cent.

Cosco experienced a 14 per cent increase in revenue, to reach $3.6 billion. However, its overall first half loss widened to $205 million, a drop of 37 per cent on the same period last year. Shipping volumes were up 16.7 per cent to 3.7 million TEU.

Source : HKSG.