Net profit at state-owned conglomerate China Cosco Shipping’s container and specialised shipping units fell sharply in 2018 from the previous year due to higher bunker costs, according to preliminary results.
Cosco Shipping Holdings, which controls Cosco’s container shipping and port operations, expects its net profit to have fallen by CNY 1.46bn ($218m) last year from the 2017 level of CNY 2.66bn.
Having taken over Orient Overseas Container Lines, the Shanghai- and Hong Kong-listed company said in a filing that its operating income, handling volume of container shipping and terminal businesses showed “substantial” year-on-year growths in 2018.
“However, due to the surge in the costs of marine fuel which is mainly resulted from the significant increase in the international oil price in 2018, the overall operating profit of the company during the reporting period decreased,” according to the filing.
Cosco Shipping Specialized Carriers, which operates heavylift and semi-submersible vessels, reported its net profit was expected to have dropped 64.7% from the 2017 level to CNY 83.8m last year.
This was despite annual revenue forecast to rise to CNY 7.58bn in 2018 from CNY 6.51bn in 2017.
“International marine fuel prices were up more than 31% in 2018 compared with the previous year. This led to an increase of CNY 390m in our operating expenses,” according to the Shanghai-listed company.
Cosco Shipping Holdings is expected to issue its full 2018 report on 30 March, while that of Cosco Shipping Specialized Carriers is due on 29 March.
