Singapore-listed ship repair, marine engineering and shipping group Cosco Corporation – a subsidiary of Chinese giant Cosco – has recorded a net loss of US$407.6 million in 2015, compared to a net profit of $14.9 million in 2014, according to World Maritime News.
The net loss is mainly caused by lower revenues and higher inventory write-down, as well as a particularly difficult Q4, 2015 which coincided with weak global demand.
Captain Wu Zi Heng, Vice Chairman and President of Cosco Corporation, said: “The global offshore market continued to slow down significantly with no signs of improvement. Amidst persistent weakness in the state of the global economy and depressed crude oil prices, the group continues to face adverse unfavourable market conditions.
“Against the backdrop of these difficult and challenging business and operating conditions, which is likely to persist and even worsen in 2016, our group will capitalise on the downturn to improve our capabilities for long-term sustainable growth in our offshore marine engineering and new shipbuilding operations.”
The shipping industry is currently feeling immense strain amid continuing weak global demand, low oil prices and high levels of overcapacity.
If shipping lines are to effectively avoid sinking, they may need to halt big ship orders and focus on cutting idle ships, as well as cut capacity on the busiest routes.