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Beijing aid helps China Cosco back to black with profit of US$261.5 million

CHINA Cosco was back in the black with the third quarter posting of CNY1.6 billion (US$261.5 million) net profit against last year's CNY1 billion quarterly loss. This year's third quarter revenue was CNY17.5 billion, up 10 per cent.

The big state conglomerate Cosco Group owed its good fortune to government subsidies and volume growth in its container shipping and its terminal business, reported Lloyd's List.

Improvement in net profit came as the company booked CNY1.4 billion with a scrap-and-build government subsidy from the Cosco Group for the decommissioning and upgrading of vessels during the period, said the report.

Beijing announced a subsidy scheme, which raised grants 50 per cent from the 2010 level to CNY1,500 per gross tonne, resulting in the scrapping 31 older ships in the first half.

During the third quarter its container shipping business handled 2.5 million TEU, up 8.2 per cent year on year. During the first three quarters, container shipping revenues were up 10.5 per cent on a year ago.

The container terminal business was 8.7 per cent up in third quarter, posting a 17.6 million TEU throughput and volumes for the first nine months were up 9.6 per cent year on year.

While managing a quarterly profit, China Cosco declared a narrowing loss for the first nine months compared to the first three quarters of 2013. That is, a CNY654 billion loss against a loss of CNY2 billion a year earlier.