Cosco Corporation (Singapore) Limited, a Singapore-listed ship repair and marine engineering and shipping group, recorded a net loss of SGD 570 million (USD 407.6 million) in 2015, compared to a net profit of SGD 20.9 million (USD 14.9 million) in 2014.
Cosco’s turnover decreased by 17.4 percent to SGD 3.5 billion in 2015 from SGD 4.3 billion in FY 2014 owing to a decrease in shipyard and shipping revenue.
Turnover from shipyard operations fell by 17.3 percent to SGD 3.5 billion in 2015 from SGD 4.2 billion a year earlier, mainly attributed to lower revenue contribution from marine engineering, partially offset by an increase in revenue from ship building and ship repair.
Turnover from dry bulk shipping and other businesses decreased by 25 percent from SGD 52.5 million in 2014 to SGD 39.4 million in 2015 on lower charter rates.
Furthermore, Cosco swung into a gross loss of SGD 214.8 million in 2015 from a gross profit of SGD 291 million in 2014.
According to the company, the net loss is mainly attributed to lower revenues and higher inventory write-down which increased by SGD 184.8 million to SGD 309.3 million in 2015 due to the impairment made for DP3 deepwater drillship, which is currently available for lease or sale.
“The global offshore market continued to slow down significantly with no signs of improvement. Amidst persistent weakness in the state of the global economy and depressed crude oil prices, the group continues to face adverse unfavourable market conditions. Against the backdrop of these difficult and challenging business and operating conditions, which is likely to persist and even worsen in 2016, our group will capitalize on the downturn to improve our capabilities for long-term sustainable growth in our offshore marine engineering and new shipbuilding operations,” Captain Wu Zi Heng, Vice Chairman and President of the Company, said.
As at 31 December 2015, Cosco’s order book stood at USD 8 billion with progressive deliveries up to early 2018. New orders received in 2015 include 7 container vessels, 2 cargo transfer vessels, 2 oil tankers, 1 shuttle tanker, 1 module carrier, 1 tanker assist/emergency response/rescue/field support vessel, 1 research vessel, 1 product oil tanker and 1 FPSO conversion.
As the world shipping market continues to face tonnage over- capacity pressures, new shipbuilding orders have fallen to a low level in 2015, and Cosco expects 2016 to be another very difficult and challenging year for the group.