CSAV Expects Loss, Seeks Capital

CSAV Expects Loss, Seeks Capital

The new chairman of Chile's CSAV warned of "negative results" for the first quarter and said the company will seek a $500 million capital increase and to sell up to 49 percent of the company's ports and shipping services subsidiary.

CSAV said weakening freight rates and higher oil prices will affect first quarter results at the carrier, which has vaulted from 16th to seventh in capacity among the world's container lines since a $710 million financial rescue in early 2009.

Juan Alvarez, CSAV's former chief executive officer, was appointed chairman of the Chilean carrier, following the Feb. 25 resignation of Jaime Claro, who took the post after the recent death of his brother Ricardo.

CSAV's board will vote next month on the elevation of Arturo Ricke, CSAV's former regional director in Hamburg, to the CEO position.

The company said its plans for the capital infusion and an initial public offering for SAAM will boost the company's capital base, allowing CSAV "to confront the adverse market scenario in the best possible manner and to increase operational efficiency and boost the development of the company in the medium and long term."

CSAV reported gross profit of $473 million in 2010, compared with a loss of $453 million in 2009, as revenue jumped 80 percent to $5.45 billion.

The carrier said its container volume rose 62 percent over 2009 and was 28 percent higher than in 2008, but during the last quarter of 2010 demand growth flattened out and rates declined "significantly."`

CSAV said its SAAM operations "are substantially less exposed to the volatility of global demand," and its revenue and profit have increased since the earthquake that hit Chile in February 2010.

SAAM operates the Chilean ports of San Antonio, Antofogasta, Iquique and San Vicente, and is a joint-venture partner in port operations in Ecuador and at Florida International Terminal at Port Everglades. It also has a 30 percent stake in competitor AGUNSA, owned by rival liner CCNI, and owns the largest tug fleet in Latin America, with more than 100 vessels.

-- Contact Joseph Bonney at jbonney@joc.com.