Cosco Shipping Holdings has reported a net profit of Rmb40.8m ($6m) for the half-year, but the result was skewed by the contribution from terminal business.
Chinese state-owned carrier Cosco saw liftings soar by 12.4% in the first half of this year, compared with 2017, to 11.2m teu, but revenue from liner services increased by only 1.3% to Rmb42.4bn.
Cosco said that the slim profit was “hard won” from an above-industry par performance and a contribution from the terminal business.
Cosco mainly blamed the rush in the delivery of newbuild ultra-large container vessels and added that its results had been negatively impacted by “surging bunker prices”.
It said: “Due to the concentrated delivery of large container vessels during the period, the growth in global capacity exceeded the growth in demand.”
Cosco’s $6.3bn majority stake acquisition of Hong Kong-based Orient Overseas International (OOIL), the parent of carrier OOCL, was completed in mid-July.
The combined Cosco and OOCL fleet, with a capacity of 2.8m teu, propelled the merged entity ahead of CMA CGM in the carrier rankings to third place, behind Maersk and MSC.
Cosco has also now become the de facto lead line of the Ocean Alliance, which also comprises CMA CGM and Evergreen as vessel-sharing members.
Cosco has pledged to keep OOCL as a separate brand and that the sales and customer services for the two carriers would “remain unchanged”. But it has clarified that back office functions would be “gradually optimised”, which it said would include “route networks, information systems, container fleets and supplier procurement”.
OOIL reported a net loss of $73m for OOCL in the first six months, which it attributed to higher fuel costs.
However, in a similar fashion to its new parent, it was aggressive in its sales, recording volume growth of 11% and 17%, respectively on the transpacific and Asia-Europe tradelanes, but not matching that with sufficient growth in turnover to mitigate the impact of soaring fuel bills.
Referring to the OOIL interims, new chairman Captain Xu Lirong said he believed that with the acquisition of OOCL the new entity would “exert great influence in the market”.