China Shipping Container Lines Company (CSCL) saw its first half results slumped to a loss of RMB834.57m ($124.96m), impacted by the weak container shipping market particularly at the start of the year.
The first half loss was a reversal of fortune from the profit of RMB831.12m in the same period of 2015.
“Due to the downturn of the shipping market, the company’s liner operations had suffered significant losses during January to February prior to the completion of the restructuring,” CSCL said.
Following the merger of China Shipping Group, parent of CSCL, and China Cosco Group to form Coscocs (China Cosco Shipping Corp), CSCL had gone through a business restructuring, moving away from its core container shipping business,
The company had its business focus shifted from container liner operation to integrated financial services consisting of diversified leasing businesses such as vessel leasing, container leasing and non-shipping finance leasing.
It claimed that upon completion of the business restructuring, the container leasing business of the company ranked number two in the world, and its non-shipping finance leasing business would focus on development of health care, education, energy, construciton, industrial equipment and other finance leasing business.
CSCL will also be renamed Cosco Shipping Development Co to reflect its new businesses.
“Given the sluggish recovery in global economic and trading activities, the shipping market has remained in doldrums in 2016, with the imbalance between supply of and demand for shipping capacity persisting. In other words, the recovery of global shipping industry is still faltering,” CSCL commented.
“In the context of weak shipping demand and shipping capacity glut, the container vessel leasing market was in decline, leading to lower freight rates for all types of vessels,” it added.
However, CSCL pointed out that vessel leasing business has in recent years remained in a growth mode in both quantity and scale, making a strategic contribution to the development of the shipping industry.
“At present, there are dozens of financial leasing companies involved in vessel leasing business in China and with the development of the business, China’s vessel leasing industry will be elevated to a higher level of development,” it said.
As at 39 June 2016, the container fleet under the management of CSCL consisted of 115 vessels with capacity totalling 842,000 teu, including 74 self-owned vessels with capacity totalling 582,000 teu.
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