Container ship giant Cosco Shipping Holdings expects to post a big drop in interim earnings in weaker markets.
The Hong Kong and Shanghai-listed owner said net profit is expected to be CNY 19.66bn ($2.71bn) in the first six months, down 74.4% from CNY 76.8bn in 2022, when rates were at record highs.
Pre-tax earnings will be around CNY 24.69bn, down 74% from CNY 95.33bn the year before.
The company noted that the changes between the demand and supply in the container shipping industry led to a year-on-year decrease of 69.31% in the average level of the China Containerized Freight Index (CCFI).
“In the context of a higher base level of performance in the same period of last year, the company’s revenue generated from container shipping business recorded a decline during the reporting period, therefore resulting in a year-on-year decrease in performance results,” Cosco Shipping said.
The fleet consists of 177 vessels: ultra-large container ships, post-panamaxes, panamaxes and feeders, as well as a handful of MPPs and general cargo ships.
There are 41 more boxships on order.
Operations were stable and the group continued to optimise its financial structure, resulting in greater resilience, the owner added.
Cosco Shipping said it was focusing on digital transformation and green and low-carbon development.
Environmental question marks
In June, investor Legal & General said it was selling out of Cosco Shipping due to what it saw as a lack of commitment to climate change.
The UK financial services giant’s Legal & General Investment Management (LGIM) said the state-controlled behemoth does have an operational target, “but the level of ambition for this target is low compared to leading peers”.
“There is no commitment or investment in low-carbon fuels, which is key to sector decarbonisation,” it said.
The wider Cosco group has 970 ships, including VLOCs, VLCCs, newcastlemaxes, LNG carriers and product tankers.
There are 52 vessels on order in total, including LNG carriers and smaller tankers.
