Cosco profits fall by two thirds

Revenues for China COSCO Holdings Company Limited, the largest container shipping company in China, fell 0.6% over the first six months of this year compared to the same period in 2005. Profits attributable to equity holders for the period were down 64.7%.

During the period, profits from container shipping and related businesses declined by 74.1%. The impact was partially offset by other segments of the group's business, particularly the container leasing business, which experienced strong demand. The company said that the decrease in profits was due to a decline in freight rates and increase in bunker prices.

“The decline in overall earnings reflects market pressures in container shipping, one key area of the Group’s business. As an integrated shipping and logistics service provider, however, the Group has been able to hedge risk through occupying businesses across the container shipping value chain,” said Wei Jiafu, company chairman.

Cosco’s shipping volume was 2,426,703 TEUs in the first half of 2006, an increase of 12.5% over the same period in 2005. Shipping volumes on all major routes experienced growth. Since the end of 2005, its membership in the CKYH alliance has enabled Cosco to increase global service routes and expand service coverage. As of 30 June 2006, the Group operated a fleet of 139 container vessels. Shipping capacity was 381,039 TEUs, an increase of 18.18% over the end of last year.

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