COSCO Pacific’s first half profits tumble 37%
Chinese container terminal and logistics services group COSCO Pacific Ltd. reported a 36.5 percent drop in net profit for the first half 2006 to $136.4 million, from $214.8 million a year ago, due to higher costs and lower profits at its container manufacturing division.
COSCO Pacific’s income from its share in China International Marine Containers (CIMC), the biggest maker of containers in the world, declined 33.3 percent to $26.8 million.
“At the beginning of this year, sales volume and container price continuously remained at low level because of unfavorable market condition by the end of 2005,” COSCO Pacific said in a statement.
China COSCO Holdings owns 50 percent of COSCO Pacific and all of COSCO Container Lines. In turn, COSCO Pacific has a 49 percent stake in COSCO Logistics.
The total throughput at COSCO Pacific’s global terminals rose 23.5 percent in the six-month period to 19.97 million TEUs. COSCO Pacific’s increased its number of container terminal berths from 81 to 104, helping its aggregate annual capacity jump 41.3 percent to 57.1 million TEUs.
“Overall performance of terminal division was satisfactory,” COSCO Pacific said.
COSCO Logistics posted a net profit of $9.3 million, up 22.2 percent over the first half 2005. The freight forwarding division handled 64.3 million tons of cargo during the period, a 25.4 percent increase from last year. The sea-freight forwarding agency business grew 17.2 percent with 905,101 TEUs handled.
The group increased the container leasing fleet at its wholly owned subsidiary Florens Container Holdings Ltd. by 8.1 percent to 1.11 million TEUs, making it the world’s third-largest container leasing company with about a 10.7 percent share of the global market.
Looking ahead to the rest of the year, COSCO Pacific said it “is confident in its future business prospects.”
“The global economy will continue to be robust in 2006,” COSCO Pacific said. “The group will continue to improve its investment strategy by further strengthening our diversified terminal portfolio in the regions of the Pearl River Delta, Yangtze River Delta and Bohai Rim.
“Meanwhile, we will further elaborate the terminal investment opportunities in the overseas market. Container management has become a new source of revenue for our container leasing division. The group intends to further expand its container leasing fleet capacity while maintaining high utilization rate so as to strengthen its leading position in the industry.
“In terms of fleet expansion, we will work closely with COSCO Container Lines to cater to its future new shipbuilding expansion plans and continue to expand our customer base by providing container leasing and management services to other international customers.