COSCO International Stable Despite Industry Headwinds

Despite a slowdown in global trade growth during 2015, the Hong Kong-listed COSCO International Holdings Limited, the shipping services arm of China Ocean Shipping, has remained stable with a 6 percent drop in its annual net profit, compared to a year earlier.

The company reported a net profit of HKD 336 million (USD 43.3 million), while in 2014 the net profit was at HKD 359 million.

COSCO International’s revenue fell by 21 percent to HKD 6 billion during the year, from HKD 7.5 billion seen in 2014.

The decrease was mainly attributed to a drop in international crude oil prices and diminished commodity demand.

“Confronted with a prolonged industry depression, the group has remained committed to pursuing organic growth of existing business by improving marketing services and strengthening lean management, as well as actively constructing the shipping services industrial cluster with innovative services and products,” COSCO International said.

The company said that, as at the end of 2015 it had a net cash position of HKD 6.2 billion, which provided strong capital support for acquisition and expansion of existing business in the future.

“The global economy is in a state of deep readjustment in 2016 with a weak recovery momentum. Growth in global trade is expected to remain sluggish and the international shipping market will continue to be beset by excess capacity. As a result, cost control measures by ship owners will continue to dominate, bringing great operating pressure to shipping service business,” COSCO said.

The company said it expects new opportunities to arise from the supply-side structural reform, “One Belt, One Road”, and the establishment of China COSCO Shipping Corporation Limited.