Cosco Posts USD 82.1m Loss amid Market Woes

Cosco Corporation (Singapore) Limited, a Singapore-listed ship repair & marine engineering and shipping group, posted USD 82.1 million net loss in the third quarter of 2015 due to losses in shipyard and shipping operations amidst unfavourable market conditions. 

Group turnover decreased 18.1% to USD 949.6 million in Q3 2015 from USD 1.2 billion in Q3 2014 owing to decreases in shipyard and shipping revenues.

Turnover from shipyard operations decreased 17.8% to USD 939.9 million in Q3 2015 from USD 1.1 billion in Q3 2014 on lower revenue contribution from marine engineering, partially offset by an increase in revenue from ship building and ship repair segment. The group delivered 3 platform supply vessels, 1 anchor handling tug supply vessel and 1 semi-submersible accommodation vessel in Q3 2015.

Cosco’s turnover from dry bulk shipping and other businesses decreased by 34.9% from USD 14.9 million in Q3 2014 to USD 9.7 million in Q3 2015 amid lower short-term rates.

The group registered gross loss for Q3 2015 of USD 10.7 million, as compared to gross profit of USD 56.7 million in Q3 2014.

“The low crude oil prices over recent months had adversely impacted the global marine industry. Languid dry bulk shipping market put pressures on the group’s dry bulk fleet while the shipbuilding market slump negatively affected the company’s shipyards. In the first 9 months of 2015, the group recorded net loss attributable to equity 3 holders of the company of USD 86.1 million compared to net profit of to USD 34.1 million in the first 9 months of 2014,” Cosco said in its Q3 report.

Captain Wu Zi Heng, Vice Chairman and President of the Company believes that additional operational challenges are to be faced in the offshore marine segment.

As at 30 September 2015, Cosco’s order book stood at USD7 .9 billion with progressive deliveries up to 2017. New orders received in the first 9 months of 2015 include 7 container vessels, 1 shuttle tanker, 1 module carrier, 1 tanker assist/emergency response/rescue/field support vessel, 1 research vessel and 1 FPSO conversion. In nine-month period, the group experienced delivery date extensions for several of its projects.

Looking ahead, Cosco said that it expects difficult and challenging business and operating conditions to persist.

In a separate announcement, Cosco said that the trading of its shares will continue to be suspended. The suspension is believed to be linked to the rumoured merger of its parent company, China Ocean Shipping (Group) Company (Cosco), with China Shipping Group, which is “still under intensified planning.” 

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