China COSCO, which operates the world's largest bulk cargo fleet and is the No.7 container shipping firm globally, suffered its worst-ever losses in 2009 when international trade was battered by the global economic crisis. But it had said 2010 will be better than last year.
"In first quarter 2010, the operating environment of the shipping sector has been improved benefiting from the continued recovery of the global economy," the company said in a statement.
Container shipping rates have also gone up since the last quarter of 2009 after liners' efforts to lift freight rates to reasonable levels.
China COSCO said its revenue from container shipping rose 75 percent to 7.5 billion yuan ($1.10 billion) in the first quarter and income per twenty foot equivalent unit (TEU) rose 31 percent.
But Maersk Line, the world's biggest container shipping company and a unit of A.P. Moller-Maersk said this month that it expected 2010 freight rates reaching break-even at best on the back of a slow recovery in demand.
Mixed Outlook
"Losses in China COSCO's container shipping segment have been narrowing and higher profits from bulk cargo shipping should help lift the company's bottom line," said Geoffrey Cheng at Daiwa.
Analysts also said the company's recovery could be dragged by the delivery of newbuilds, which will peak in 2010-2011.
China COSCO had an orderbook of 54 container vessels at the end of 2009 with total capacity of 414,926 TEU to be delivered from 2010 to 2013.
It has also ordered 30 dry bulk vessels with total capacity of 4.38 million DWT to be delivered through 2013.
China COSCO reported a net profit of 882.17 million yuan ($130 million) for the three months ended March 2010, the first profit after five quarters of losses, against a loss of 3.35 billion yuan the same period last year.
The company, which controls container leasing and port company COSCO Pacific , made a record net loss of 7.47 billion yuan in 2009.
Its rival China Shipping Development reported a 45 percent rise in first quarter net profit to 458.4 million yuan. (Reuters)
