As the global economic recovery is picking up, integrated shipping and logistics provider China Cosco Holdings Company is confident that its business performance for this year will improve.

Speaking at the 2009 annual results announcement press conference in Hong Kong Friday, Wei Jiafu, chairman and chief executive officer of China Cosco said that as the Chinese economy is leading the global recovery from the 2008 financial tsunami and the mainland export sector has already rebounded sharply, market demand for the company's shipping and logistics services will be stimulated.

Wei added that for the first quarter this year, export and import shipments on the mainland rebounded 44.1 percent compared to the same period in 2009.

However, Wei declined to comment on whether the company can turn a profit this year, but reiterated that the company will soon declare its first quarter performance for this year later this month.

"We have already increased shipping charges for the coming peak season for most of the shipping routes in Europe, Asia Pacific and America," said Sun Jiakang, executive vice president of China Cosco, citing raw material shipments in regions like India, Middle East and the mainland as spurring demand for the company's shipping services.

Sun downplayed the prospect that renminbi (RMB) appreciation expectations will seriously affect company business performance for this year, because the RMB exchange rate is predicted to remain stable or change only slowly in the first half of this year.

Concerning the capital expenditure (capex) for this year, China Cosco Chief Financial Officer He Jiale revealed that the capex will be slashed by 11.6 percent to 10.2 billion yuan, on a year-on-year (YoY) basis. He stressed that the company will not decrease its capex drastically, as the company is committed to allocating a suitable level of financial resources to development of different business sectors.

As the global shipping industry was hard hit by the global financial crisiss, China Cosco plummeted into the red, with a net loss of 7.47 billion yuan in 2009, down from a net profit of 11.60 billion yuan in 2008. The company will pay no final dividend.

In 2009, the Group's revenues reached 68.46 billion yuan, down 48.1 percent on a YoY basis.

China Daily

(HK Edition 04/24/2010 page3)