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China Daily Website

COSCO expected to return to the black by end of the year

Updated: 2013-12-03 13:52

China COSCO Holdings Co Ltd, the listing arm of the nation's largest shipping company, is expected to return to the black by the end of the year after selling assets to counter its losses over two consecutive years.

The company announced in a statement on Dec 2 that the sales of Qingdao Management and Shanghai Tianhongli were completed at the end of November. The sales of the two companies, for about 3.68 billion yuan ($604 million), will be included in the consolidated financial statements of the group for 2013.

Guo Weihua, board secretary of China COSCO, said in an interview that: "We are confident of returning to the black", if the sales of the two assets can be included into the company's accounts for the fourth quarter.

COSCO has been hit by a weakening global economy and a supply glut of ships since the beginning of 2011. The company posted losses for two consecutive years, a net loss of 10.45 billion yuan in 2011 and a net loss of 9.56 billion yuan in 2012, and a third year would trigger a delisting from the Shanghai stock exchange.

The company has started to sell assets from the first quarter of this year. It is estimated that COSCO raised about 6.6 billion yuan in total from selling assets this year.

COSCO last month reported a net loss of 2.03 billion yuan in the first three quarters of the year, which means it can return to the black if it can keep its losses below 1.64 billion yuan in the fourth quarter, according to media reports.