China Shipping Container Lines Company Limited (CSCL) has recorded a steep decline in profit recording 97.5 % fall in earnings when compared to the last year’s results.
Namely, the profit attributable to owners of the parent in the first half of 2015 amounted to RMB 10,643,000 (USD 1.6 million) a major fall from RMB 431.6 million (USD 67.4 million) recorded in the corresponding period of 2014.
CSCL’s revenue was RMB 15.99 billion, a fall of RMB 1.4 billion or 8.1% as compared with the same period of 2014.
The downturn in the container shipping market was attributed to the imbalance between shipping capacity supply and demand, which kept the boxship market sluggish in the first half of 2015.
“Freight rates for Asia-Europe trade lanes hit record low levels under the impact of new shipping capacity put into market amid a weak economic growth momentum in the eurozone. On the other side, benefiting from steadily growing demand boosted by the stable recovery of the U.S. economy, coupled with the impact of the U.S. West Coast port strikes, freight rates for Trans-Pacific trade lanes stayed at stable levels,” CSCL said.
Meanwhile, freight rates for Asia Pacific trade lanes underwent volatility under the gradual upgrade of shipping capacity.
The group’s shipping capacity in the H1 2015 reached 908,579 TEU as at 30 June 2015, representing a net increase of 181,966 TEU as compared with that as at the end of 2014.
In terms of fleet capacity, CSCL took delivery of all five 19,100 TEU new vessels in the said period and pressed ahead with the disposal of old vessels, sped up the surrender of outdated vessels and acquired special vessels to replenish its fleet, resulting in a total operating capacity of 909,000 TEU.
In terms of future prospects for the second half of 2015, CSCL was not optimistic saying that “the international trade still won’t be cheerful.”
“With the massive influx of new shipping capacity, shipping market will face even more uncertainties. The shipping industry is gradually developing towards scale expansion, intensive operation and supply chain integration.
Thresholds of market entry and service standards will continues to rise along with the increasing scale of container liners, innovations in large vessel operations and in service concepts,” CSCL went on to say.