China’s Leading Shipping Line Sees A Whopping 95% Profit Surge In 2024

China’s leading container shipping company, COSCO Shipping Holdings, has made significant strides in the year 2024. The company recorded an operating revenue of RMB 233.86 billion ($33.29 billion), marking a 33.29% increase from the previous year.

Net profit reached RMB 55.40 billion ($7.75 billion), showing an increase of a whopping 95.08% year-on-year. The net profit attributable to shareholders doubled, reaching RMB 49.10 billion ($6.87 billion), a 105.78% rise from 2023.

Earnings before interest and taxes (EBIT) also saw a sharp increase of 90.74%, reaching RMB 69.95 billion ($9.79 billion). The company’s operating costs rose by 12.29% to RMB 164.77 billion, but the strong revenue growth offset these expenses, leading to a highly profitable year.

The company’s financial performance is largely due to increased demand, particularly from the United States, and disruptions in global trade routes.

The ongoing Red Sea crisis forces shipping companies to reroute vessels onto longer and costlier paths, reducing available capacity and pushing freight rates higher. This worked in favour of major carriers like Cosco.

The company’s container shipping volume increased by 10.12% to 25.94 million twenty-foot equivalent units (TEUs).

Revenue from container shipping operations reached RMB 225.97 billion, a 34.4% rise from the previous year. Meanwhile, COSCO’s container terminal business recorded RMB 10.81 billion in revenue, showing a 3.98% increase.

The total container throughput reached 144.03 million TEUs, showing a 6.06% year-over-year growth.

COSCO maintained strong financial health throughout 2024, with its return on net assets (ROE) increasing by 10.8 percentage points to 22.6%. The company’s earnings per share rose by 108.11% reaching RMB 3.08.

The company also improved its financial stability by reducing its gearing ratio to 42.7%, a decline of 4.69 percentage points from the previous year. COSCO generated RMB 69.31 billion in net cash inflow from operating activities, gaining a massive 206.91% year-over-year increase.

Trade tariffs and proposed port fees targeting Chinese ships could lead to higher operating costs, impacting profitability.

Reference: Cosco shipping

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