Cosco Shipping Holdings, the liner unit that was born out of the merger of Cosco and China Shipping last year, has announced a net loss for 2016 of Rmb9.91bn (US$1.4bn) as it continued to struggle through the complexities of the merger amid a moribund liner shipping market. Cosco had recorded a Rmb469.3m profit in 2015. The losses were strictly in line with the company’s warning issued in January 2017.
The huge losses kept coming despite a 28% increase in revenue to Rmb66.57bn from the 54% increase in container volume now standing at 16.9m teu.
Cosco Shipping said scale and cost synergies had reduced the shipping cost per teu by 7% year-on year. But the economies of scale were wiped out by a 12% fall in the rate per teu to Rmb4,141 per teu.
Revenues from terminal and related business increased 8% to Rmb3.76bn.
The company will be hoping for better fortunes as it joins the Ocean Alliance launch tomorrow (April 1). Jointly deploying around 350 containerships with estimated capacity of 3.5m teu Ocean Alliance comprises CMA CGM, Cosco Shipping, Orient Overseas Container Line and Evergreen.