Hong Kong-listed Cosco Shipping Holdings has, in a statement to the Stock Exchange, warned shareholders it expects to make a full year 2016 loss of up to Rmb9.9bn (US$1.4bn).
The company attributes the loss largely to a weak international shipping market where capacity outstripped 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 group was lower than the growth of the container shipping volume, and the increase in revenue was less than the increase in costs,” the company said.
Another factor was a non-recurring loss incurred due to the disposal of assets, namely Rmb2.43bn when the company gave up its interest in China Cosco Bulk Shipping and Florens Container Holdings, together with book losses from the scrapping of older vessels.
Cosco Shipping Holdings is a unit of China Cosco Corporation Limited. Its core businesses are container shipping and terminal services.