CSCL deepened its losses by a whopping 894% to Yuan1.45bn ($226m) in the first quarter of 2012, having posted a Yuan146mloss in the same period last year.

 

CSCL attributed the loss to higher costs and lower revenues. It sets the stage for what many analysts expect to be a brutal quarter for China’s major box lines. CSCL’s first-quarter loss is just over half the full-year loss of Yuan2.7bn that the company reported in 2011.

The company’s first quarter operating revenues stood at Yuan6.4bn, about level with the first quarter of last year, but operating costs increased 20% to Yuan8.1bn.

 

Total cash and cash equivalents at the end of March stood at Yuan9.7bn, up from Yuan8.8bn at the end of March 2011.

 

As the company said in its earnings statement, the increase of balance of cash and cash equivalents “was mainly due to the increase in bank borrowings during the period”.

 

Cash received from borrowings increased about 12,000% to Yuan6.1bn in the first quarter of 2012, compared to Yuan47min the first quarter of 2011.

 

The substantial borrowings are sign that CSCL is staying alive thanks to its banks, at least in this difficult season. The company’s finance costs came to Yuan71mfor the quarter.

 

CSCL warned when it released its annual results that the first half of 2012 would be difficult due to overcapacity. The first-quarter figures do not fully reflect the general rates increases by the major container lines that began on March 1 and have upped rates per teu on major trades by as much as $1,000 or more since.

 

Company chief executive Li Shaode said during the annual earnings report that the company would optimise its fleet structure and cut costs to improve bottom-line performance.