Asia/Pacific News
CSDC Issues Profit Warning, Predicts H1 Loss
Hong Kong-listed China Shipping Development Company Limited (CSDC) [HKG:1138] issued a profit warning Wednesday saying it expects to record a loss in its consolidated net profits for the first half year ended June 30, 2012.
CSDC cited the main reason for the loss was due to insufficient demand in both domestic and international shipping markets, and the decrease in freight rates as a result of general oversupply of global shipping capacity.
High bunker prices also played a factor, with the Shanghai headquartered firm saying the continuing increase in international oil prices had caused the Group's fuel cost "to remain at a high level."
CSDC say the results are also impacted by the March 15, 2012 announcement to change their assessment of the value of the company's vessels by extending the upper limit of their useful life estimation from 22 years to 25 years.
The announcement stressed that the assessment was preliminary and based on unaudited consolidated management accounts, with further details of the Group's performance to be disclosed as part of the interim results on or before August 30, 2012.
Ship & Bunker reported in May John Fredriksen said he expected the current shipping crisis to last another two to three years, saying "most of the companies are just not going to make it."
