CHINA Cosco has issued a profit warning, saying it expects to post a first half 2012 net loss that will be more than 50 per cent higher than the CNY2.8 billion (US$439 million) loss it made in the first half of 2011.The company attributes the poor results to a weak global economy and slower growth in China, as well as the persistence of "excessive capacity and the imbalance in supply an demand situation in the international shipping market".
Cosco's statement to the Hong Kong stock exchange also said that "freight rates in the dry bulk shipping market remained low and the relevant costs, including fuel costs, remained at high levels".
In the first quarter of 2012 the company reported a net loss of CNY2.7 billion (US$423 million).
For the whole of 2011, China Cosco recorded a loss of CNY10.5 billion, with 48 per cent of its revenue coming from container shipping last year.
JAPAN's "K" Line, the world's 15th biggest box carrier, narrowed its quarterly net loss for the three months ending June 30 to JYN700 billion (US$8.9 million) compared the JYN3.7 net loss it suffered last year - while at the same time posting an operating profit of JYN4.1 billion over last year's corresponding quarterly operating loss of JYN9.9 billion.
In "K" Line's container operations, the number of laden containers on North American routes increased 17 per cent from the first quarter of 2011. On European routes, the increase was a more modest nine per cent.
Intra Asian volume for "K" Line went up 15 per cent with the number of laden containers carried by company ships going up 11 per cent in the same period.
"Freight rates in the first quarter recovered on all routes and improved substantially compared to Q1 2011," said the company statement.
The company's reorganisatiuon also played a role. "Structural reforms implemented included the reorganisation of unprofitable trade routes, the introduction of large size energy efficient vessels and expansion of slow steaming. Financial performance in the first quarter showed improvement compared to the first quarter of 2011, the company said.
In the company's logistics segment, financial performance also showed improvement. "In the international logistics market, demand for emergency air cargo for the restoration of supply chains following the flooding Thailand showed a strong move and the domestic logistics market was steady overall," the company said.
Going forward, "K" Line said: "Containership business will enter its peak season in the summer, and we expected freight rate levels achieved in the spring to be maintained. Although negative effects from the economic stagnation in Europe heading into the winter season are anticipated, we expect financial results to improve compared to the previous fiscal year because of the effects of our structural reforms that include reorganisation of unprofitable trade routes, expansion of slow steaming and cost reductions by increasing operations of large size energy efficient vessels."
JAPAN's largest container carrier, Mitsui OSK Lines (MOL), has posted a JPY5 billion (US$64 million) loss in the first quarter of fiscal year 2012 from April 1 to June 30, narrowing its JPY8 billion quarterly loss last year.
Revenues from April 1 to June 30 rose 8.59 per cent year-on-year to JPY379 billion from JPY349 billion recorded in the same quarter last year.
"We posted a loss for the first quarter despite rationalisation of vessel allocation and cost reduction. However, the loss at ordinary income was reduced not only year on year, but also against the fourth quarter of fiscal year 2011 (from January 1 to March 31, 2012)," said the company statement, adding that this indicates a move towards recovery of MOL's business performance.
For containership segment, though the loss was JPY2.4 billion, it showed a significant improvement for the world's 10 largest container carrier, from the quarterly loss of JPY5.4 billion last year, attributable to "improved supply-demand balance backed by a gradual recovery in cargo volume since the beginning of spring," and the successful freight rates increases, particularly on the Asia-Europe trade, according to the company statement.
Also, the carrier said the decrease of the loss year on year was also due to further efforts on cost reduction, including the wider enhancement of slow steaming, despite increases in bunker prices.
Overall, the carrier said it has concerns about the slowdown in the Chinese economy, which are added to "anxiety about Europe's prolonged sovereign debt problem".
Additionally, overcapacity is still a threat as a large number of newly built ships continue to be delivered into the market.
In response to the "worsening gap between fleet supply and cargo demand," the carrier said it has "pursued policies to confront the market, for example, forming tie-ups with other ocean shipping companies and reducing the number of ships in service."
Revenues from April 1 to June 30 rose 8.59 per cent year-on-year to JPY379 billion from JPY349 billion recorded in the same quarter last year.
"We posted a loss for the first quarter despite rationalisation of vessel allocation and cost reduction. However, the loss at ordinary income was reduced not only year on year, but also against the fourth quarter of fiscal year 2011 (from January 1 to March 31, 2012)," said the company statement, adding that this indicates a move towards recovery of MOL's business performance.
For containership segment, though the loss was JPY2.4 billion, it showed a significant improvement for the world's 10 largest container carrier, from the quarterly loss of JPY5.4 billion last year, attributable to "improved supply-demand balance backed by a gradual recovery in cargo volume since the beginning of spring," and the successful freight rates increases, particularly on the Asia-Europe trade, according to the company statement.
Also, the carrier said the decrease of the loss year on year was also due to further efforts on cost reduction, including the wider enhancement of slow steaming, despite increases in bunker prices.
Overall, the carrier said it has concerns about the slowdown in the Chinese economy, which are added to "anxiety about Europe's prolonged sovereign debt problem".
Additionally, overcapacity is still a threat as a large number of newly built ships continue to be delivered into the market.
In response to the "worsening gap between fleet supply and cargo demand," the carrier said it has "pursued policies to confront the market, for example, forming tie-ups with other ocean shipping companies and reducing the number of ships in service."
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