China Shipping Rises After Return to Profit: Hong Kong Mover
CSCL posted net income of 991 million yuan ($159 million) in the three months ended Sept. 30, compared with a loss of 951 million yuan a year earlier, the Shanghai-based company said in a statement yesterday. Container lines worked together to maintain rates above break-even levels in the period even as demand for goods from China falls amid Europe’s debt crisis.
“We remain positive on CSCL’s future earning thanks to the industry’s self-discipline,” Lawrence Li, an analyst at UOB Kay Hian Holdings Ltd., wrote in a report. “Cost pressure eased on lower bunker fuel prices” during the period, he said.
CSCL has improved freight rates, boosting Asia-Europe and Transpacific average rates by 85 percent year-on-year and 58 percent year-on-year respectively, according to Li.
Larger rival China Cosco Holdings Co. (1919), which also operates dry-bulk ships, narrowed its third-quarter loss to 1.53 billion yuan from 2.07 billion yuan.
The Tianjin, China-based shipping company said it may post a full-year net loss on “imbalances between supply and demand, low dry bulk freight rates” and higher costs.
China Cosco shares rose 4.9 percent to close at HK$3.85.
Container lines, including CSCL and China Cosco, have also agreed to raise rates on Asia-U.S. west coast routes by $400 per forty-foot box starting Dec. 1, according to a statement yesterday from the Transpacific Stabilization Agreement, a shipping group.
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