Cosco Pacific Increases Profit Despite Weaker Euro
- Business & Finance
Hong Kong-based container terminal operator Cosco Pacific Limited, part of Cosco Group, saw a 5% dip in revenue from its terminals business for the first six months of 2015, mainly attributed to the depreciation of the Euro which led to a decrease in revenue from Piraeus Terminal in Greece.
The performance of Piraeus Terminal in the first half of 2015 was stable, with revenue in Euro rising by 4.7%, according to Cosco Pacific. However, as the Euro depreciated against the U.S. dollar, revenue in this currency dropped by 14.3% to USD 78.4 million, as compared to USD 91.5m reported for the corresponding period of 2014.
Despite a 5% drop in revenue, Cosco Pacific managed to increase its net profit from its terminal operations by 11.1%. The terminal business brought the company USD 121.2m net profit in 1H2015, as compared to USD 109.1m in 1H2014.
Total throughput at the company’s terminals rose by 4.2% to 33,831,834 TEU (corresponding period of 2014: 32,481,568 TEU).
Improved net income in the company’s terminals business helped offset a 6.8% drop in the container leasing, management and sale businesses, bringing Cosco Pacific’s overall net profit for the period to USD 164.4 million, a 12% increase compared to USD 146.8 net profit reported for 1H2014.
“Looking ahead to the second half of the year, in light of the volatile global economic conditions, stagnant economic recovery in the US and Europe, as well as the downward pressure on China’s economic growth, fierce competition is expected to continue within the sector,” the company says in its financial report.
”Such challenging operational environment is bound to have some impact on the Group’s terminals and container leasing businesses, and the growth in container throughput of the Group’s terminals in 2015 may turn out to be slower than expected. Therefore, in order to maintain steady profit growth in the terminals business, the Group will continue to focus on cost control,” COSCO Pacific said commenting on the outlook.
With regards to its terminals business, COSCO Pacific will adhere to the principle of “Four Areas of Strategic Focus” that proposed last year.
Under the principle the company will focus on “seizing development opportunities in hub ports in line with the trend towards mega-vessels, focus on enhancing COSCO Pacific’s brand value by optimising the operational model of the terminal subsidiaries, and align the direction and strategy for its terminals business with global development strategies for COSCO’s fleet and its shipping route network, to proactively seize strategic opportunities from China’s “One-Belt-One-Road” and “Yangtze River Delta Economic Belt” initiatives, also to access potential investments in terminal projects along the “One-Belt-One-Road”, with a view to propel a global hub network.”