COSCO Shipping Ports (HKEX: 1199) reported higher revenue and volumes for the first half of the year. But the spin-off of a stake in one of its port assets and changes in accounting standards meant overall profit fell.
The world's largest marine terminal operator said China's trade outlook slowed in the first half due to the trade disputes with the U.S. But the company's overseas assets continued to outperform its domestic assets.
COSCO Ports reported a 4% rise in first-half revenue from a year earlier to $517.9 million. The company cited strong revenue growth at Greece's Piraeus Terminal, which was up 15% to $127.9 million. Its Guangzhou South China Oceangate Terminal saw revenue increase 5% to $81.5 million. CSP Spain Group reported a 3% increase in revenue to $145.4 million.
During the quarter, COSCO Ports also acquired a stake in the Chancay Terminal in Peru, its first greenfield project terminal in South America.
COSCO Ports also announced an investment agreement for additional warehousing and logistics assets near its Guangzhou terminals.
Overall profit to shareholders for the period fell 12% to $147.8 million for the period. The drop came from the dilution effect from a share issuance on the Shanghai Stock Exchange for one of COSCO Ports' largest assets, Qingdao Port International. COSCO Ports took a $22.5 million charge as the share issuance raised less than the recorded value of COSCO Ports' stake in Qingdao.
The adoption of new accounting standards for operating leases also resulted in a one-time charge of $6 million. Excluding the one-off charges, COSCO Ports reported equity earnings of $176.4 million, up 4.4% from a year earlier.
Total throughput at terminals where COSCO Ports has a stake rose 5.4% for the period to 59.7 million twenty-foot equivalent units (TEUs).
The Bohai Rim region along China's northern coast saw overall throughput rise 3.3% to 19.3 million TEUs. Qingdao Port International led the growth with a 9.8% gain in volume to 10.3 million TEUs. The world's largest container ship, the MSC Gulsun, made its first port call at Qingdao during the quarter. That gain was offset by a decrease in domestic container volumes at the Dalian Container Terminal, which saw volume drop 9.8% by 4.2 million TEUs.
Yangtze River Delta terminals saw a 3.4% increase in throughput to 9.98 million TEUs. Pearl River Delta ports saw volumes of 13.1 million TEUs, up 2.7%. Southeast Coast ports reported 2.89 million TEUs in volume, up 2.8%.
The company's overseas assets saw the biggest gain, rising 13.2% to 13.7 million TEUs. COSCO's joint venture terminal in Singapore with PSA International added two new berths in January in response to increasing regional demand. COSCO-PSA Terminal rose 53.8% to 2.4 million TEUs. COSCO Ports' Piraeus Terminal in Greece saw a 238% increase in TEUs to 2.56 million thanks to increased port calls from the OCEAN Alliance and THE Alliance.
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