China Shipping Container Lines saw its share price crash almost 7 per cent yesterday after it warned it would post a first-half loss as a result of adverse trading conditions in the global container shipping market.
Shares in the mainland's second-largest container shipping company closed at HK$2.17, down 6.87 per cent on the day. The stock dropped to HK$2.14 immediately after the market opened after the company issued its profit warning.
The company gave no estimate for its projected loss, but the company reported a 146.15 million yuan (HK$176.89 million) net loss in the first quarter of this year. Analysts said operating conditions had worsened since then, with a continued fall in container freight rates.
'CSCL's first half loss could well top 300 million yuan,' said one shipping analyst, who declined to be named.
This would compare with a net profit of 1.17 billion yuan between January and June 2010. Total net profit last year was 4.2 billion yuan on revenue of 34.8 billion yuan. Some 23.11 billion yuan of revenue, or more than 66 per cent, came from transpacific and Asia-Europe and Mediterranean services.
Both of these trade lanes have been badly affected this year from overcapacity as deliveries of new vessel depress freight rates.
