Investment of China COSCO Holdings's for capital expenditure to reach 7.63 billion yuan this year
Lower earnings from container shipping as well as 500 million yuan (HK$490 million) in exceptional expenses on put options dragged down China COSCO Holdings's net profit 65 percent in the first half, The Standard reports.
China's biggest container shipper said net profit at its core container shipping and related business fell 74 percent to 733 million yuan because of rising oil expenses and a decline in freight rates, especially on Asia-Europe routes.
"We see freight rates showing signs of recovery in the third quarter," chairman Wei Jiafu said. "Though the current freight rate is 8 percent to 10 percent higher than the beginning of this year, it is still 3 percent lower than the same period last year."
Revenue per container, or 20-foot equivalent unit, shrank by 13.8 percent, while the overall cost per TEU increased by 3.6 percent amid high oil prices. Excluding the impact of fuel, costs per TEU were down 6 percent.
"We will impose a surcharge on container shipping and also use hedging to offset some negative impact of high fuel costs in the second half," Wei said. China COSCO, with a fleet of 139 container vessels, said capacity was 381,039 TEUs at the end of June. It will continue to develop business in emerging markets such as Vietnam, Central America, and the Caribbean.
Through COSCO Pacific, it manages terminals and runs a container leasing business. COSCO Pacific handled 14.97 million containers in the first half, up 23.5 percent.