COSCO SHIPPING Holdings Announces 2018 Interim Results

2018-08-30 22:28By： xinde marine news

COSCO SHIPPING Holdings Announces 2018 Interim Results
Profit for 1H 2018 Reaches RMB 40 Million

(30 August 2018, Shanghai) － COSCO SHIPPING Holdings Co., Ltd. (“COSCO SHIPPING Holdings” or “the Company”) (SSE: 601919; HKEx: 1919) today announced its interim results for the six months ended 30 June 2018 (the “Period”).

In the first half of 2018, in the light of the overall continuous recovery of the global economy, demand for container shipping services grew moderately and global cargo shipping volume increased by 6.2% as compared to the same period of last year. However, due to the concentrated delivery of large container vessels during the Period, the growth in global capacity exceeded the growth in demand, which put downward pressure on the freight rates. In the first half of the year, the China Containerized Freight Index (CCFI) was 797 points on average, representing a decrease of 3.8% as compared to the same period of last year. The average CCFI for the second quarter recorded a decrease of 4.6% as compared to the first quarter of this year. Meanwhile, surging bunker prices resulted in higher costs of liner companies.

During the Period, as the Company’s container shipping business outperformed the industry average and the terminal business continued to contribute profit, COSCO SHIPPING Holdings remained profitable and realized net profit attributable to its shareholders of RMB40,795,600. COSCO SHIPPING Lines, a wholly-owned subsidiary of the Company, shipped a total of 11.235 million TEUs, 12.4% higher than the same period of last year and exceeding the market average growth rate. The cargo throughput handled by the terminals of COSCO SHIPPING Ports, a subsidiary in which the Company holds a controlling interest, increasing by 26.5% year-on-year to 56.707 million TEUs.

As at 30 June 2018, the Company’s fleet comprised 393 vessels with a total capacity of 2.04 million TEUs. Its shipping capacity increased by 15.8% as compared to the same period of last year and exceeded 2 million TEUs for the first time, which marked a significant milestone for its development.

The Company promoted the globalization process and scale expansion to achieve greater synergy between container shipping and terminal operation sectors.

In the first half of this year, COSCO SHIPPING Holdings actively responded to the "Belt and Road" initiative. The Company put 189 vessels to serve the countries along the “Maritime Silk Road”, which accounted for approximately 60% of the Company’s total fleet size. The Company added a number of shipping services relating to emerging markets, including Far East - South Africa, Far East - West Coast of South America, Europe - West Coast of South America, and South Asia – Europe. The Company’s global service network was thus further expanded. During the first half of the year, the Company’s shipping volume in emerging markets grew by 27% as compared to the same period of last year, which was much higher than that of the East-West trade.

Most of the controlled and non-controlled terminals of the Company are located along the routes of the “Belt and Road”, with a total of 274 berths under operation, including 184 container berths with an annual handling capacity of 102.29 million TEUs. Among them, Singapore COSCO-PSA Terminal added one berth at the beginning of this year, leading to a significant increase of 63.3% in its throughput. The Company fully utilized the role of the Port of Piraeus in Greece as a hub of the “Maritime Silk Road” by making more port calls by its self-operated fleet and the fleet of the Ocean Alliance. In the first half of the year, the total throughput handled at the Port of Piraeus increased by 18.4% as compared with the same period of last year.

In accordance with its shipping service network, the Company actively developed the sea-rail transportation business, providing customers with more choices and "end-to-end" transportation solutions. In the first half of the year, the number of regular trains operated for the "China-Europe Sea-Rail Express", which went through the Port of Piraeus in Greece, reached 475, with cargo volume increasing by 100% as compared to the same period of last year. Meanwhile, the Company cooperated with China Railway Corporation to launch three international regular trains from Tianjin to Moscow, Nanchang to Moscow, and Lianyungang to Almaty / Tashkent, respectively. At present, the Company operates a total of 110 railway lines departing from China for foreign trade, 150 lines for domestic trade, and 20,000 to-door-service points.

The Company followed up the trend of digitalization of shipping industry and realized the strengths of shipping alliance.

COSCO SHIPPING Holdings vigorously explored the ways to implement digitalization and innovation in order to enhance the connectivity with customers and partners. In the first half of 2018, the Company teamed up with JD.COM and Goodfarmer to launch the services for tracing the origins of Ecuador's bananas by using Block-chain technology. It actively participated in the development of Big Data platform for customs clearance in Shanghai, thereby speeding up the clearance of import and export cargoes and enhancing the service efficiency.

In addition, the Company fully supported the China International Import Expo and completed the research and development and testing of the container shipping booking platform for exhibitors. Based on the E-Panasia platform, the company established an E-commerce working group for foreign trades and strived hard to provide customers with services which enable them to complete a fully online foreign trade.

The Ocean Alliance’s “Day 2 Product” for 2018-2019 commenced operation in early April, leading to the optimization and upgrading of related shipping services. Consisted of 42 services involving 335 vessels and capacity of 3.6 million TEUs, the Ocean Alliance has the most comprehensive network and service with a leading role in coverage and frequency by providing services to 621 port-pairs.

Adhering to the customer-oriented approach, the Company further promoted nine service standards globally, established the standardization process for import and export customer services, provided core customers with personalized and customized services, and further optimized customer experience through information technology.

The Company completed a major acquisition and implemented a new dual-brand strategy for greater synergies.

As a core project for implementing globalization and scale expansion strategies, the transaction of acquiring OOIL was successfully completed on 7 August. Upon completion of the acquisition of OOIL, the Company's shipping capacity exceeded 2.7 million TEUs, with its shipping capacity ranking rising to the third place in the world. After the delivery of new vessels in existing orderbook, the total shipping capacity of the Company will exceed 3 million TEUs.

According to the established strategy, the two brands “COSCO SHIPPING” and “OOCL” will achieve synergistic development. Their front desk sales and customer service systems will remain unchanged so as to ensure the continuity of their customer services; while their middle and back desk functions such as cost control will be gradually optimized to improve their operational efficiency and service standards. Greater synergies will be achieved in service networks, information systems, container equipment and supplier procurement.

In the future, COSCO SHIPPING Holdings will focus on the implementation of four strategies: "globalization, end-to-end, digitalization and dual-brand". It will optimize the resources of container shipping, terminals and supply chain businesses, striving to create greater synergies from the dual brands of its container shipping business. The Company will further promote the coordinated development of container shipping and terminal businesses, actively participate in the preparations of China International Import Expo, and strive to meet customer needs, thereby building the Company into an integrated world-class container shipping service provider and creating value for customers and returns for shareholders.

Sources:XINDE MARINE NEWS

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COSCO SHIPPING Holdings Announces 2018 Interim Results

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