China Cosco net profit up to $38.3 million in 2013
China Cosco Holdings Co. swung to a 2013 net profit with the help of asset sales, removing the risk of being delisted, though its core shipping operations will continue to suffer from soft demand for trade and global overcapacity, the company said in its press release.
Hong Kong- and Shanghai-listed China Cosco said Thursday its net profit for the 12 months ended Dec. 31 was 235.5 million Chinese yuan ($38.3 million), according to international accounting standards. Its 2013 revenue was 66.14 billion yuan, down 3.1% from 68.27 billion yuan, because of lower freight rates.
The listed flagship of China's biggest state-run shipping group racked up losses totaling 20 billion yuan ($3.30 billion) in 2011 and 2012, as the world's shipping market lingered in the doldrums. A third year of losses would threaten the company's listing status in Shanghai.
The company managed to return to profitability on the back of one-off gains from a series of asset sales to Cosco's parent company. In March of last year, it unveiled plans to sell its logistics business to parent Cosco Group for $1.1 billion. That followed a decision in May by Cosco's ports unit to sell its stake in a container manufacturer to Cosco Group for $1.22 billion. In August, Cosco agreed to sell most of its stakes in two office properties in China to the state-run parent, in a deal valued at more than $600 million.
Excluding the one-time gains, it recorded a loss of 1.30 billion yuan at operating level in 2013, narrowed from an operating loss of 8.12 billion yuan the previous year, it added.
China Cosco's results follow a weak earnings performance reported by its smaller Chinese rival China Shipping Container Lines Co., which on Wednesday reported a 2013 net loss of 2.65 billion yuan, compared with a full-year net profit of 522.7 million yuan a year earlier.
Earlier this month, Hong Kong-based Orient Overseas (International) Ltd. posted an 84% decline in 2013 net profit as it faces soft demand and industry overcapacity. In February, Singapore-based Neptune Orient Lines Ltd., which runs the world's seventh-biggest shipper by fleet size, said its 2013 loss narrowed to $76 million from a year-earlier loss of $412 million, aided largely by one-time gains from the sale of a building and cost cuts. The company's liner operations recorded a loss before interest and taxes of $231 million in 2013, because of weak freight rates.