China Shipping Container Lines, the mainland's second-largest container carrier, is set to post a massive loss of up to 2.5 billion yuan (HK$3.08 billion) for last year due to the downturn in consumer demand in western economies and slower mainland growth. This came after the company issued a profit warning yesterday and said it expected to report a net loss for 2011 following a net profit of 4.2 billion yuan in 2010.
Analysts said CSCL was the first container line to issue a profit warning, but it is unlikely to be the last.
'The full-year profit warning was not really a surprise especially after CSCL reported a 610.7 million yuan net loss in the first half of last year,' said an analyst who declined to be named. 'Operating conditions deteriorated in the third quarter as container volumes failed to meet expectations and it was unable to impose peak-season surcharges until very late in the year. The fourth quarter was probably only marginally better than the third quarter.'
In October, the company said it saw a net loss of 1.58 billion yuan for the first nine months of 2011, including a net loss of 951.2 million yuan between July and September.
Jon Windham, head of Asian marine transportation research for Barclays Capital, forecast CSCL would post a net loss of 2.07 billion yuan on revenue of 28.9 billion yuan last year in a research note in November.
Windham also forecast that China Cosco Holdings, which includes Cosco Container Lines, would post a net loss of 5.3 billion yuan for 2011.
