COSCO reports profits rose 135% in 2007
China COSCO Holdings Ltd. reported profit of $2.8 billion (19.5 billion RMB) in 2007, a 135 percent increase over 2006.
Group revenue was 108 billion RMB ($15.5 billion), up 37 percent compared to 2006. The company said about 42 percent of revenue came from container shipping, 24 percent from dry bulk shipping, and 10 percent from logistics, with smaller contributions from container terminal and container leasing activities.
The company moved about 5.7 million TEUs in 2007, about 11.7 percent more than 2006. Revenue in the segment was up 14.4 percent to $6.6 billion 45.8 billion RMB ($6.6 billion).
At the end of 2007, the company was operating 144 containerships with capacity of 435,138 TEUs, 9 percent more than at the end of 2006. It also had 56 ships with total capacity of 394,524 TEUs on order.
In a letter to shareholders, Chairman Wei Jiafu said that while the U.S. economy was slowing, “the emerging economies maintained a relatively faster growth, and the demand for shipping continued to increase. The China economy, driven by local consumption growth, is expected to maintain a positive growth trend in import trade volume.”
He expected in 2008, “the overall market supply and demand in the container shipping market will remain stable,” saying “factors limiting the effective utilization of the shipping capacity continue to exist and will reduce the supply of effective shipping capacity to a certain extent.” This is an apparent reference to factors such as port congestion and slow steaming of vessels.
The company said the dry bulk shipping business maintained strong growth in 2007 moving about 264.7 million tons, a 15.1 percent increase over 2006. Coal volumes rose 9.7 percent to 90.8 million tons, and ore volumes improved 19.1 percent to 113.9 million tons. Carriage of other cargoes increased 23.2 percent to 60.1 million tons.
At year-end, the company had a fleet of 419 dry bulk vessels with total capacity of 33 million deadweight tons.
During the year, the group acquired from the COSCO Group pursuant to three acquisition agreements, the entire equity interests in COSCO Bulk Carrier Co., Golden View Investment Ltd., Qingdao Ocean Shipping Co., and Shenzhen Ocean Shipping Co. Ltd., which are mainly engaged in dry bulk shipping and related businesses.
In 2008, “China’s logistics sector will be faced with good development opportunities,” Wei said. “With its growing importance as a global procurement center, investments from the foreign-invested manufacturing and trading enterprises in China will continue to increase and lead to a higher demand for logistics services. Meanwhile, China enterprises have accelerated their pace of internationalization, giving rise to corresponding logistics demand overseas.”