COSCO Ports Q3 profits drop amid CSCL integration

The port terminal operator arm of the recently merged China COSCO Shipping saw net profits from continuing operations tumble 37.3 percent to $43.9 million in third quarter 2016 despite a 3.3 percent increase in revenues compared with the previous year.    COSCO SHIPPING Ports Ltd. reported profits attributable to equity shareholders of the company of $43.9 million in the third of quarter 2016, a 37.3 percent drop compared with the same 2015 period, according to the company’s most recent financial statements.
   Formerly known as COSCO Pacific, COSCO SHIPPING Ports is the port terminal operator arm of China COSCO Shipping Corporation Ltd. (COSCOCS), the newly merged shipping conglomerate formed from state-run firms COSCO and China Shipping.
   On March 18, 2016, COSCO Ports closed its acquisition of all issued shares of China Shipping Ports Development Co., Ltd. (CSPD), making the former China Shipping terminal operating division a wholly-owned subsidiary of the company.
   “The adoption of merger accounting has resulted in changes in certain relevant comparative figures, which have been restated to conform with the current year’s presentation,” the firm said.
   In addition, earnings comparisons were impacted by the company’s disposal of all issued shares in container lessor Florens Container Holdings Ltd. (FCHL).
   Diluted earnings per share (EPS) from continuing operations (not including profits from FCHL) stood at $1.47 per diluted share for the quarter compared with $2.38 per diluted share in third quarter 2015, despite revenues ticking up 3.3 percent year-over-year to $144.1 million.
   Including the gain on disposal of all the issued shares of and profits from FCHL, Q3 2016 profits attributable to equity holders of the company was down 52 percent from $91.5 million in Q3 2015.
   Through the first three quarters of 2016, profits from continuing operations slid 27.8 percent year-over-year to $149.8 million even as revenues remained relatively flat (up 0.7 percent) at $419.1 million.
   Throughput at COSCO Ports’ terminals decelerated during the third quarter due to “sluggish global economic growth and negative growth in China’s foreign trade,” the company said.
   Total volumes were up 4.7 percent to 24.2 million TEUs for the quarter and 3.9 percent to 70.2 million TEUs in the first nine months of the year.
   Earlier this week, the U.S. Federal Maritime Commission approved the proposed OCEAN Alliance of COSCO SHIPPING and fellow container carriers CMA CGM, Evergreen Marine and Orient Overseas Container Line Limited (OOCL), following an “exhaustive” review.
   Although the vessel sharing agreement for ships serving the major east-west trades between Asia, Europe and the North America technically takes effect Monday, it is not expected to commence operations in earnest until April 2017.