BEIJING: COSCO Shipping Holdings said recently that it would raise 12.9 billion yuan ($2 billion) through a share sale to build new ships as it returned to profit for the first nine months of the year.
The Chinese shipping giant reported a profit of 2.7 billion yuan for the nine months to September.
COSCO Shipping Holdings saw overall volumes rise 23% to 5.49m TEUs in the third quarter as market conditions improved. For the year-to-date, volume rose 30.4% to 15.49m TEUs.
Having flagged that it would post a profit earlier this month, it also posted revenues of 67.6 billion yuan as a global recovery in freight rates gathers pace.
COSCO even put out a positive profit alert with the announcement saying that "under the warming market environment of container shipping, it is expected that cumulative net profit from the beginning of the year to the end of the next reporting period will improve significantly when compared with the same period of last year".
COSCO Shipping said it would undertake a private placement to fund the building of 20 container ships, six of which will be able to carry over 21,000 twenty-foot containers.
The Container Shipping Industry entered a period of recovery this year after a prolonged slump, which has prompted shipping lines to contemplate new ship orders. While the container shipping market recovered, the group also continued to improve its internal performance and managed to lift the average revenue per container and volume compared to the previous corresponding period and operating margin also improved significantly, COSCO said.
Intra-Asia trade was a standout winner, with volume rising 32% to 1.54m TEUs in the third quarter. Transpacific also saw a good 22% gain to 775,375 TEUs and domestic China trade saw a 28% rise to 1.72m TEUs.