CSAV losses mount, denies sale

   The Chilean liner carrier CSAV has sought to dispel rumors that it plans to sell its container shipping business after the line lost $890.9 million through the first three quarters of 2011.
   The steep loss, compared to a $218.9 million profit in the same period in 2010, came even as the line’s revenue increased 6.3 percent, to $4.4 billion. Volume rose 23 percent, to 2.5 million TEUs.
   On Friday, the line released a statement refuting reports last week that it had asked its lead financial advisor Celfín Capital to seek a buyer for its container business.
   “CSAV Group has implemented a profound restructuring plan that will enable the company to tackle the challenges faced by our organization and the industry,” the line said in a statement. “This plan has not changed.”
   CSAV then noted the restructuring steps it has taken in recent months, including:

• A capital increase of $1.2 billion to strengthen the line’s financial position.
• The redesign of its services portfolio, “focusing mainly on those markets where the company has clear competitive advantages.”
• Joint ventures with other major shipping companies to enhance the efficiency and quality of CSAV´s services.
• Separation of the cargo shipping business from the port and terminal operation business (operated by its subsidiary SAAM), in an effort to promote the growth of the latter.

   CSAV also emphasized that it has searched for a strategic partner for its container business, but not a buyer for that business unit.
   Yet most analysts consider CSAV vulnerable. Its position in a number of east-west trades has shrunk this year, and the line has accordingly drawn down its mostly chartered fleet by 21 percent since August. As of Nov. 28, it had only four ships (accounting for 36,000 TEUs of capacity) on its orderbook, according to maritime analyst Alphaliner. That compared to 12 ships (representing nearly 99,000 TEUs of capacity) in mid-August.
   This summer, the line tied up slot sharing deals with Mediterranean Shipping Co. and CMA CGM, but those largely involved CSAV withdrawing services and buying slots on the larger lines’ services
   Additionally, its profitability has sagged well behind the industry average.
   According to American Shipper research, no line lost more over the 2006-2010 period. It sustained $694 million in operating losses over that five-year span, compared to an average of $373 million in profits for other publicly-traded top 20 liner carriers.