Shanghai-based China Shipping, the smaller of China's two state-run container lines, did not provide details on the size of the loss. The announcement was made to the Shanghai Stock Exchange ahead of the release of its financial report for 2009. The line lost $775 million through the first three quarters of 2009, but most carriers saw their operations stabilize financially in the last quarter of the year.
According to American Shipper research, the line made $54 million in operating profit from its container line division in 2008, a 91 percent drop from its 2007 operating profits, though its net profits were about $20 million. From 2004 through 2008, the line made more than $2 billion in operating profits.
But analysts are warning the line's balance sheet is not particularly strong, due to heavy leasing and ship financing commitments. The line is the world's eighth-largest by fleet capacity, with more than 447,000 TEUs, of which 44 percent is chartered capacity. China Shipping's order book doesn't appear outrageously large compared to other lines in the top 20, with 16 vessels on order, representing 33 percent of the line's current capacity. The average size of the ships on order is 9,400 TEUs, compared to the current average vessel in its fleet, 3,639 TEUs.
Lloyd's List also reported Monday that the company's board of directors removed Li Xueqiang as deputy general manager of the line and replaced him with Feng Xingguo, China Shipping's head of ship management.
