COSCO Shipping Holdings to Bounce Back to Profit in Q1

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  • As SAAM plans to Invest USD 133.5 Mn in 2017

COSCO Shipping Holdings, the container arm of China Cosco Shipping Group, said in a stock exchange filing that it expects to return to profit for the three months ended 31 March 2017 recuperating from the net loss reported in the same period of last year.

The net profit is estimated to be approximately RMB 260 billion (USD 37.6 million) against a loss of RMB 4.48 billion with basic earnings per share of RMB-0.44 in the corresponding period of last year.

The projection is attributed to the firmly recovering market that pushed up container freight rates and integration synergies of the company.

“During the reporting period, the container shipping market mildly recovered, and the average China Containerized Freight Index (CCFI) was 825.3 points, representing an 11.7% increase from the same period of last year,” the company said.

According to preliminary estimates, the company’s cargo volume increased by approximately 54% year-on-year.

COSCO said that it has yet to finalize the quarterly results of the group for the Q1 of 2017.

The container shipping company reported a loss of USD 1.4 billion for 2016 amid grave market situation and record low container shipping freight rates.

As of December 31, 2016, COSCO’s own fleet consists of 312 container ships.

In the meantime, Chilean port, towage and logistics services provider SAAM has announced plans to invest a total of USD 133.5 million this year.

The company intends to invest USD 85 million in maintenance and extension of its current assets – San Antonio Terminal Internacional, Terminal Portuario Guayaquil and San Vicente Terminal Internacional.

SAAM materialized the acquisition of two concessions in Puerto Caldera, the second largest port in Costa Rica, for USD 48.5 million. The company now controls 51% of Sociedad Portuaria de Caldera (SPC) and of Sociedad Portuaria Granelera de Caldera (SPGC), whose transferred annual volume totals 5.5 million tons.

In the past four years, the company has invested a total of USD 500 million in equipment and infrastructure.

In 2016, SAAM’s earnings amounted to USD 54.5 million, representing a 5.6% growth.

“Thanks to our portfolio diversification and adequate commercial strategy, we recorded a good performance during difficult times for the industry. We offset the drop in markets like Brazil, Mexico, and particularly Chile, and strengthened others such as Peru and Central America. We keep a significant cash flow and dividends for our shareholders,” Felipe Joannon, the company’s Chairman of the Board, said.

Last year, SAAM inaugurated the new dock in San Vicente Terminal Internacional, Chile, which increased its capacity by 40%. Additionally, the company inaugurated a system for the reception, warehousing and shipping of mineral concentrates in Terminal Internacional del Sur, Peru. SAAM also completed the tugboat fleet renovation process.

Furthermore, Joannon drew attention on “a cautious assessment” of the need for a mega port in the central zone.

“The current port infrastructure, with the construction of new terminals in San Antonio and Valparaíso and the ongoing extensions, ensure enough capacity to support foreign trade efficiently in the next 10 to 15 years. We believe that the current priority is to significantly improve the terminals’ connectivity and complementary infrastructure”, he added.

World Maritime News

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