COSCO Shipping Ports eyes growth despite throughput decline

Due to challenges caused by the COVID-19 pandemic, Hong Kong-based port operator COSCO Shipping Ports suffered decreases in both throughput and earnings in the six-month period ended 30 June 2020.

Image by COSCO Shipping Ports

Total throughput dropped by 3.6 per cent to 57.6 million TEU in the first half of the year, while equity throughput declined by 6.6 per cent to 18.1 million TEU as a result of the lower demand.

Additionally, total throughput from terminals in which the group has controlling stakes decreased by 15.6 per cent to 10.5 million TEU and throughput from the group’s non-controlling terminals decreased by 0.4 per cent to 47.1 million TEU.

Revenue fell by 12.6 per cent to $452.7 million in H1 2020 from $517.9 million in H1 2020.

Gross profit was $99.2 million in H1 2020, a decrease of 35.4 per cent compared to $153.4 million seen in the corresponding period a year earlier.

On the other hand, net profit rose by 10.5 per cent yoy, to $163.4 million from 147.8 million recorded in H1 2019. The result included one-off after-tax disposal gain of $61.4 million from the disposal of all the shares in COSCO Ports (Yangzhou) Limited together with its 51 per cent interest in Yangzhou Yuanyang International Ports Co., Ltd. and the disposal of all the shares in Win Hanverky Investments Limited together with its 51 per cent interest in Zhangjiagang Win Hanverky Container Terminal Co., Ltd. and 4.59 per cent interest in Yangzhou Yuanyang Terminal, and the one-off after-tax disposal gain of $7.1 million from the disposal of Jiangsu Yangtze Petrochemical Co., Ltd.

Although the global economy and trade activities have not yet fully recovered, China’s imports and exports statistics have shown signs of a strong recovery. COSCO Shipping Ports said it continues to implement a series of measures, such as lean operations, control cost and improve efficiency. As at the end of June, the group has cash and bank deposits of approximately $1.118 billion.

What is more, the port operator continues to optimise information system and enhance the application of Navis N4 system to realise standardised terminal operation and management mode to improve the group’s management efficiency, as well as reduce the overall management cost of the terminals. It is expected that CSP Spain Group and Quan Zhou Pacific Terminal strive to launch Navis N4 system this year.

“COSCO Shipping Ports is well prepared to embrace the rising demand,” the port operator pointed out.

The group intends to keep a close eye on the declining valuation of global terminal resources and opportunities of acquisition to actively look for project with high potential in Southeast Asia, the Middle East, Africa and etc. Specifically, the group aims to build hub ports, gateway ports and strategic terminals with controlling stakes to improve the company’s profit and enhance synergy.

“Leveraging on the synergy from the parent company and the OCEAN Alliance and benefiting from the ship calls from other shipping alliances, the group is well positioned to improve throughput when demand recovers,” COSCO Shipping Ports concluded.

COSCO Shipping Ports’ terminal portfolio covers the five main port regions in Mainland China, Southeast Asia, Middle East, Europe, South America the Mediterranean. As of 30 June 2020, CSP operated and managed 360 berths at 36 ports worldwide, of which 206 were for containers, with a combined annual handling capacity of 115 million TEU.

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