China Shipping Container Lines (CSCL) has issued a profit warning announcing an expected loss of RMB 2.8 billion (USD 425 million) for the financial year ending December 31st.
CSCL said that out of this amount RMB 2 billion is attributed to an operating loss and RMB 800 million to impairment on assets.
The results resume the trend recorded in the first half of the year when CSCL recorded a steep decline in profit with 97.5 % fall in earnings when compared to 2014 results.
The company believes that the loss is a reflection of a market downturn and low freight rates in the container industry along with a slowdown in Chinese economic development.
What is more, owners continued to add capacity to the already oversupplied market pushing rates even further down.
As there is a slight chance of market recovery any time soon, CSCL believes that there are signs of impairment on vessels and containers assets of the company as off 31 December 2015 as well.
World Maritime News Staff