Mixed fortunes ahead, says Cosco International
March 28, 2013 Category Logistics, Ports & sea transport
Cosco International, the marine fuels, paints and ship-trading subsidiary of Cosco, is facing mixed fortunes this year as shipping markets get tougher and it targets opportunities and acquisitions. Chairman Ye Weilong said there would be limited recovery in freight and ship charter rates this year, while the supply of new ships being delivered would outpace the growth in cargo demand. Consequently, shipping companies will adopt more stringent cost control measures, which could see ship repairs and maintenance cut. He said the company was exploring more development opportunities. Cosco Europe and Yuantong Marine Service signed a memorandum of understanding to acquire German marine equipment company Hanyuan Technical Service Center. Managing Director Xu Zhengjun said the company was still continuing to discuss merger and acquisition opportunities in the marine fuels sector, but there was no specific timetable for acquisitions. The opportunities include the 50% stake held by Cosco’s parent company, China Ocean Shipping (Group), in marine fuels company China Marine Bunker (PetroChina). Ye said there was speculation that the central government could adopt shipping-friendly policies later this year. Among the possibilities thought to be under consideration were tax breaks for Chinese shipping companies and shipyards and minimum freight rates for domestic cargoes. Cosco International saw net profit drop 7% to HKD363 million last year from HKD390 million. Turnover fell 6% to HKD10 billion from HKD10.66 billion a year earlier. Marine fuel was the biggest revenue earner, contributing HKD6.28 billion of the total, while marine and container coatings were the main profit drivers, generating HKD137.86 million in net profit.
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