Hong Kong-listed CSCL says it expects to book red ink of CNY 2.63bn ($434.9m) for 2013, as a CNY 552.69m profit for 2012 is wiped out.
It blames a slow recovery of the world economy, alongside “the unbalanced and unsynchronised development of the main economic systems and the increased supply and demand imbalance of the container transportation” for the decline.
“Faced with severe economic situations, the company reasonably and actively coped with the challenges and insisted on focusing on efficiency and the company has taken the initiative to promote the increase of the container transportation fee by adjusting its operational strategy flexibly,” CSCL said in a statement.
“However, due to the insufficient shipping volume caused by the severe imbalance of supply and demand in the international container transportation market, the company expects to record a loss for the year ended 31 December 2013.”
Tough fourth quarter
CSCL racked up a loss of CNY 1.67bn over the first three quarters of 2013, meaning red ink of close to $160m in the fourth quarter is being anticipated.
According to Johnson Leung of Jefferies a sharp drop in Intra Asia earnings is likely to prove a drag on fourth quarter results for liner shipping companies in 2013.
“In fact, IA freight rates have fallen to a four-year low in 4Q13 as per the top line reports,” he said in an earnings preview today.
Like the Trans-Pacific, Intra-Asia has been a victim of over capacity as container liners cascaded capacity from Asia Europe for better volume growth potential, he says.
