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COSCO SHIPPING Q3 Operating Profit More Than Doubles

FreightWaves

COSCO SHIPPING Holdings Co. Ltd. (HK:1919) reported operating profit of 1.57 billion yuan renminbi ($221 million) in the third quarter of 2019, more than double the 600 million yuan earned in the third quarter of 2018. Net profit amounted to 1.356 billion yuan in the third quarter of 2019, about the same as the 1.36 billion yuan profit in the third quarter of 2018.

Total revenue from operations in the third quarter of 2019 amounted to 39.51 billion yuan, compared with 37.05 billion yuan in the same period last year.

COSCO SHIPPING Holdings is the parent of COSCO SHIPPING Lines as well as the owner of 75% of Orient Overseas (International) Ltd. (OOIL), the parent company of Orient Overseas Container Line (OOCL).

COSCO SHIPPING Holdings acquired OOIL last year. Combined, they are the third-largest container shipping company in the world after Maersk and Mediterranean Shipping Co., according to Alphaliner.

COSCO SHIPPING Holding said as of Sept. 30, the fleet operated by the Group included 502 container vessels, with a total shipping capacity of 2,975,968 TEU. COSCO and OOCL, CMA CGM (including its APL brand), and Evergreen are members of the Ocean Alliance space-sharing agreement.

Revenue from its container shipping routes amounted to 35.5 billion yuan in the third quarter or 7% more than in the third quarter of 2018. That revenue amounted to nearly 90 percent of COSCO SHIPPING Holdings' revenue. The company also has a terminals subsidiary called COSCO SHIPPING Ports, which reported its earnings separately.

COSCO SHIPPING Holdings said in the third quarter its ships carried 6,643,206 TEU, not quite 2% more than in the same period last year. Volumes grew most sharply between Asia and Europe, including the Mediterranean, where they were up more than 7%.

In a quarterly report to the Hong Kong Stock Exchange, the company said in the first nine months of the year it has "proactively responded to adverse external factors" and "focused on improving the quality of shipping services, fully leveraged the advantages of scale and synergies after the acquisition of OOIL, and ... achieved relatively good operating results."

COSCO noted it has completed the sale of the Long Beach Container Terminal in California as required by the U.S. government when it acquired OOIL. It said the sale of the terminal will be recorded in its fourth-quarter results, and as a result, "It is anticipated that the accumulated net profit for 2019 of the Group will increase significantly as compared to last year." In April, COSCO said the Long Beach terminal, considered to be one of the most technologically advanced in the U.S., had been sold for $1.78 billion to a Macquarie Group infrastructure fund.