COSCO Cuts Loss, Approves Shipping Deal with Vale

China COSCO Holdings managed to slash its quarterly annual loss by 45.3%, and is trying to move forward with the previously announced ore transportation agreement with Brazil’s mining corporation Vale.

China COSCO ended the first three months of 2015 with a RMB 1.03 billion (USD 166 million) loss, a RMB 877 million improvement compared to the same period a year earlier.

China COSCO says that it managed to reduce the loss by disposing of 22 older vessels, which was the main reason behind the group’s 65.5% dip in non-operating expenses.

The quarterly revenue was RMB 14.83bn, up 4.4% compared to the same period the year before

COSCO’s container shipping arm handled 2,344,629 TEUs in the quarter, representing an increase of
12.8% as compared to the corresponding period of last year.

The total throughput of the group’s container terminal business was 16,471,466 TEUs, representing an increase of 6.6% as compared to the same quarter of last year.

However, the group’s dry bulk shipping business completed shipment volume of 39,456,789 tons, representing a decrease of 6.07% year-on-year.

COSCO plans to improve the results in the dry bulk sector by approving the implementation of a framework agreement signed with Vale back in September 2014.

According to the agreement, COSCO Bulk and Vale will enter into a 25-year contracts of affreightment. COSCO Bulk also committed to build and operate ten new very large ore carriers, as well as to purchase four existing very large ore carriers owned by Vale International.

China COSCO also authorized the management of a company to negotiate the four very large ore carriers owned by Vale International and its corresponding transportation agreement.