Cosco loses $1bn in first nine months

Cosco, the flagship unit of the country’s top shipping conglomerate China Ocean Shipping, posted a loss of Yuan1.5bn in the third quarter.

Its previous quarter level was Yuan2.2bn and the year-ago level was Yuan2.1bn.

“The macro environment is clouded by various uncertainties of international trade,” Cosco said in a statement.

“In addition, bunker and labour costs stay at high levels, leading to a difficult operating environment for the market players.”

The statement said Cosco “maintains a solid financial and solvency position” and it “will carry out relentless efforts to enhance its operations and make the most from its competitive advantages” after its cashflow protection was described by Standard & Poor’s as “weak and volatile” and its liquidity as “less than adequate”.

Cosco insisted in the statement it has a “balanced” debt structure, with short term borrowings staying at “a reasonable level”.

The company’s short-term borrowing reached Yuan5.6bn as of the end of September, sharply higher than Yuan2.9bn at the beginning of this year, with additional loans for working capital.

Cosco’s cash reserves stood at Yuan38.3bn, down from Yuan 43.1bn a year ago.

The company saw improvement in its container shipping business, where volumes grew 13.4% on year to 2.1m teu and revenues rose 26.5%to Yuan 11.5bn in the last quarter.

However, its dry bulk division shipped 56.1m tonnes in the three months, down 16.2% on year.

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