China COSCO Holdings Co. Ltd. has issued a profit warning
, stating it expects "to record a significant net loss" for 2012 in contrast to its profit of 10.4 billion Chinese yuan renminbi ($1.7 billion) in 2011.
In a statement issued to the Hong Kong Stock Exchange, COSCO said the expected loss "is primarily due to the imbalance between supply and demand in the international shipping market. Although the freight rates in the container shipping market had rebounded moderately in 2012, the overall rate for the year was unsatisfactory. In addition, the dry bulk shipping market remained weak. The average Baltic Exchange Dry Index (BDI) for the year of 2012 was 920 points, a drop of 40.6 percent compared to the average of 1549 points in 2011, while fuel and other related costs remained high."
The company noted it was only announcing a "preliminary estimation made by the company’s finance division, which has not been reviewed or audited." - Chris Dupin