COSCO SHIPPING Holdings Co. Ltd has issued its profit warning regarding 2016 annual results.
During the Reporting Period, with slow growth in global container shipping demand and oversupply of shipping capacity, the international shipping market still lacked solid improvement in addressing the imbalance in supply and demand.
As a result of the weak market, during the Reporting Period, the growth of revenue generated from the container shipping business segment of the Company was lower than the growth of the container shipping volume, and the increase in revenue was less than the increase in costs. In addition, a non-recurring loss was incurred due to the disposal of assets during the Reporting Period and a loss was recorded before the disposal of dry bulk shipping business. Therefore, based on the preliminary estimation made by the finance department of the Company, the Company is expected to record a net loss attributable to equity holders of the Company for the Reporting Period of approximately RMB9.9 billion.
According to the preliminary estimation made by the finance department of the Company, without taking into account the net loss incurred by demolition of vessels, the Company expects to realise a profit before interests and tax (EBIT) of approximately RMB700 million in the 3Q16, which demonstrates the benefits from its business integration and reflects the recovery of container freight rate.
During the Reporting Period, the Company made vigorous efforts to drive business integration in accordance with China COSCO SHIPPING Corp.’s strategy to accelerate and deepen corporate reform. Within a span of two months commencing from 1 March 2016, the container shipping business unit completed the restructuring of its domestic network in an efficiency manner and consolidated its offices at nine major ports and over 400 outlets in China under one roof. The merger of its overseas offices was completed at the end of October as well. Meanwhile, the Company started its IT system migration in May and completed five months later.
The Company further deepened business reform and completed the restructuring of its organisational structure, management team, legal structure, IT system, container management and supplier management.
Looking ahead into 2017, the Company will adhere to its established positioning and strategy, focusing on the development of core operations. It will step up efforts to strengthen customer services, yield management, cost control, service innovation, risk management and overseas development for its container shipping business. In order to firmly grasp the valuable opportunities created by the "One Belt and One Road" initiative, the Company will accelerate the expansion of its global terminal network and create greater synergies between container shipping and terminal operations so as to boost its competitive strengths in international market. Riding on the latest developments of the industry, the Company will enhance its innovation capability and increase cooperation with its partners, thereby creating a win-win ecosystem for the shipping industry. It will strive hard to become the top-tier container shipping and terminal services provider in the world, creating value to customers and returns to shareholders.
Read the article online at: https://www.drybulkmagazine.com/shipping/03022017/cosco-shipping-releases-4q16-results/