China Cosco plans to cancel or postpone some of its vast portfolio of ship orders, scotching speculation that the state-controlled shipping line might be forced to increase its order book to support China’s shipyards.
The company, the world’s biggest operator of dry bulk ships, announced its plans on Thursday alongside results showing pre-tax profits fell from RMB26.1 billion in 2007 for to RMB15.7 billion ($2.3 billion) in 2008, on revenue up to Rmb131billion from RMB112 billion.
Many observers had expected Cosco to take on some of the orders for ships placed at Chinese shipyards likely to be cancelled as shipping markets suffer a severe downturn.
China is the world’s second-biggest shipbuilder after Korea and Cosco is a force in both dry bulk and container shipping.
Most analysts believe owners ordered far too many dry bulk and container ships during the boom that ended last year.
Cosco’s results statement said only that the company was in negotiations with shipyards over delays and cancellations of dry bulk ships, without giving precise numbers.
The Financial Times reports that the 58 ships that Cosco has on order would expand its dry bulk capacity by more than a fifth.
In container shipping, the company said it wanted to delay delivery of the largest three of the nine ships it is due to receive this year until 2010.
The lack of specifics on the dry bulk cancellations prompted scepticism from some shipping observers about whether Cosco would eventually be allowed to tear up the contracts.
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