However, COSCO SHIPPING Holdings said it does expect to have earnings before interest and tax of approximately 700 million Chinese yuan renminbi for the fourth quarter of 2016, excluding the net loss it incurred from the demolition of vessels.
COSCO SHIPPING Holdings expects to have a net loss attributable to equity holders of $1.4 billion for 2016.
COSCO SHIPPING Holdings Co., Ltd., a subsidiary of state-run ocean carrier China COSCO Shipping Corp., said in a notice filed with the Hong Kong Stock Exchange that it expects to record a net loss attributable to equity holders for 2016 of approximately 9.9 billion Chinese yuan renminbi (U.S. $1.4 billion) in contrast to the 283 million yuan renminbi (RMB) profit it recorded for 2015.
However, the company did say that in 2016, it “had gradually achieved synergies generated from its business restructuring, and the performance of the group significantly improved on a quarterly basis.”
COSCO SHIPPING Holdings does expect to have earnings before interest and tax (EBIT) of approximately 700 million RMB for the fourth quarter of 2016 “without taking into account the net loss incurred by demolition of vessels.”
The company said that in 2016, “With slow growth in global container shipping demand and oversupply of shipping capacity, the international shipping market still lacked solid improvement in addressing the imbalance in supply and demand.”
In addition, COSCO SHIPPING Holdings noted how the Baltic Dry Index for dry bulk ships, along with the Shanghai Containerized Freight Index and the China Containerized Freight Index for containerized exports from China, all dropped to a historic lows in 2016.
“The growth of revenue generated from the container shipping business segment of the Group was lower than the growth of the container shipping volume, and the increase in revenue was less than the increase in costs,” the company said.
In 2016, the company incurred:
• A net loss of 2.43 billion RMB as a result of the disposal of its 100 percent equity interest in China COSCO Bulk Shipping (Group) Co., Ltd. and 100 percent equity interest in the container leasing company Florens Container Holdings Ltd.;
• A loss of 1.053 billion RMB from decommissioning, demolition and disposal of vessels (At the end of January, it sold eight containerships for scrap, resulting in a book loss of 638 million RMB, as part of the integration with China Shipping);
• And a loss of 762 million RMB on bulk shipping before it sold the bulk shipping business.