Asia’s largest container shipping company China Cosco Holdings Co posted a net loss of Yuan7.2bn ($1.1bn) for the first six months of 2016, reversing the Yuan2bn net profit seen during the same period last year as excess capacity dragged down cargo rates.
China COSCO is part of China Cosco Shipping Corporation (COSCOCS), a shipping giant created earlier this year from the state-driven merger of former rivals China Ocean Shipping (Group) Company and China Shipping Group.
China COSCO said in a statement that global container shipping market has been sluggish since the second half of 2015, with freight rates at record lows.
While revenues rose by 2.6 per cent to Yuan29.63bn for the six months ended June, costs rose by more than 16 per cent to Yuan31.13bn.
Consolidated net losses came to Rmb6.8bn, the largest interim loss at a firm listed on a mainland stock exchange in the last ten years, according to Wind data.
China COSCO said market conditions will remain challenging and the container shipping industry may continue to be plagued by the over-capacity problem. Other risks include the uncertainty about US interest rates and potential geopolitical tensions.