China Cosco Has Wider-Than-Estimated $432 Million Loss on Shipping Slump
The company’s commodity-carrying and container-ship units had combined operating losses of 3.62 billion yuan, based on a Hong Kong stock exchange statement yesterday. The Tianjin, China-based shipping line was expected to post a 1.5 billion- yuan net loss, according to the median of nine analyst estimates in a Bloomberg News survey.
Sales from moving commodities tumbled 27 percent, 10 times the pace of decline in volumes, while average container rates fell 14 percent as an expanding global fleet boosted competition. The company has also had at least three vessels arrested in the past two months by shipowners chasing overdue payments.
“China Cosco is facing the biggest challenge since the global financial crisis,” said Huang Wenlong, a Hong Kong-based analyst with BOC International Holdings Ltd. “I am very pessimistic about the second half because the growth rate in shipping capacity is unprecedented.”