Port Report: Cosco Ports reports good volumes out of China, but overseas bets better

Piraeus Container Terminal ( Photo: Cosco Shipping Ports )

World’s largest operator of marine terminals saw first quarter throughput at its non-China-based assets grow faster than China-based ones.

Cosco Shipping Ports (HKEX: 1199) reported a 28 percent drop in first quarter net income due to a one-off charge from the public share offering of one of its China terminal operations.

The world’s largest operator of marine terminals said volumes at its Chinese terminals registered decent growth, but overseas operations were the standout with much stronger growth. And it issued a cautiously optimistic forecast for trade, as long as policymakers do not escalate a trade war.

Cosco Shipping Ports reported first quarter 2019 net income of $49.9 million, down from the $69.2 million it reported in the first quarter of 2018.

It recorded a $22.5 million loss after its stake in Qingdao Port International was diluted following an offering of shares on the Shanghai Stock Exchange.

Excluding the one-time effect, net income would have risen 4.7 percent from a year ago. Revenue was up just over 4 percent for the quarter to $247.7 million.

At the 36 marine terminals in which it has a controlling or partial stake, Cosco Shipping Ports said total volume rose 5.6 percent in the first quarter to 28.7 million twenty-foot equivalent units (TEU). The rise came from the growth in vessel calls from its parent company, Cosco Shipping Holdings (HKEX: 1919), and its container ship alliance partner, Ocean Alliance.

Throughput at its China-based terminals was up 3.6 percent for the quarter to 22.1 million TEU, with its equity share of that volume up 3.1 percent to 6.3 million TEU.

The Bohai Rim region along China’s northern coast and the company’s largest by volume saw total throughput up 3.8 percent to 9.2 million TEU. An increase out of Qingdao Port International for the first quarter of 2019 was offset by a decline at Dalian Container Terminal, both of which are the region’s largest.

Volumes out of the Pearl River Delta region were up 3 percent for the quarter with the two largest terminals, Yantian International Container Terminals and Guangzhou Terminal both up for the year.

Yangtze River Delta terminals saw volumes up 4.6 percent to 4.85 million TEU, with declines at Shanghai terminal offset by growth at other locations.

The standout for the quarter are the company’s non-Chinese assets with total throughput up 13 percent to 6.6 million TEU.

Cosco’s purchase of a majority stake in the Piraeus Container Terminal, Greece’s largest, appears to be paying off with a 24 percent gain in volume. Likewise, Cosco’s joint venture terminal with PSA International in Singapore saw 54 percent growth in the quarter.

Cosco Shipping Ports said “there are still uncertainties in the global economy in 2019.” But it said it hopes the now 16-month old trade war between the U.S. and China will be resolved, the accommodative policy of federal reserve banks, and burgeoning trade ties between China and Europe “may gather momentum of growth for global economy.”

As for future investment, Cosco Shipping Ports said it plans to install Navis N4 terminal operating software at three sites through the second half of 2019 to boost efficiency.

It is also looking at additional warehousing and logistics at the Port of Nansha.

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Michael Angell, Bulk and Intermodal Editor

Michael Angell covers maritime, intermodal and related topics for FreightWaves. His interest in transportation stretches back several generations. One great-grandfather was a dray horseman along the New York waterfront and another was a railway engineer in Texas. More recently, Michael has written about the shipping industry for TradeWinds, energy markets for Oil Price Information Service, and general business topics for FactSet Mergerstat and Investor's Business Daily. When he is not stuck in the office, he enjoys tours of ports, terminals, and railyards.