China Cosco says Q1 net loss of 2.7 b yuan

Reuters: China COSCO Holdings Co Ltd, flagship of the country’s biggest shipping conglomerate, made a net loss in the first quarter of 2.7 billion yuan ($429 million) as a continued supply glut in its bulk carrier business pushed freight rates to loss-making levels.

China COSCO, which operates the world’s largest bulk cargo fleet and is the fifth-biggest container shipper globally by capacity, has also been hit by rising fuel costs and slowing growth in international trade amid an uncertain global economy.

Its first-quarter results compared with a net loss of 503.3 million y uan in the first quarter of last year, the company said on Thursday in a filing to the Hong Kong stock exchange.

A meaningful turnaround following a series of freight rate hikes in COSCO’s container shipping sector was unlikely to offset the losses from dry bulk, analysts said.

The Baltic Dry Index, which tracks rates to ship dry commodities such as grain and iron ore, hit a record low of 647 in February. It has rebounded to stand at 1,137 on Wednesday but was still 35 percent below the year-end level of 2011.

Shares in China COSCO, which also operates a container leasing and terminal business via COSCO Pacific Ltd, have risen 19 percent this year after losing more than half of their value in 2011. They outperformed a 13 percent rally on the broader market this year. ($1=6.3041 Chinese yuan)