COSCO Corp Sinks into Red as Shipping Losses Pile On
Image Courtesy: COSCOSingapore-listed ship repair, marine engineering and dry bulk shipping company COSCO Corporation (Singapore) Limited has recorded a net loss of USD 11.7 million in the first quarter of 2016, compared to a net profit of USD 4.2 million in the corresponding quarter of 2015.
Group turnover plunged by 27.1 percent to USD 722.3 million in the quarter, against USD 991.2 million seem in the same period a year earlier. The company said that the decrease is mainly attributed to falls in shipyard and dry bulk shipping revenues.
COSCO further said that its turnover from shipyard business dropped by 26.9 percent to USD 716.6 million from USD 980.8 million reported in the first quarter of 2015, owing to lower revenue contributions from marine engineering and ship building, partially offset by an increase in revenue from ship repair.
In the dry bulk shipping and other businesses, the company’s turnover decreased by 45.2 percent from USD 10.4 million to USD 5.7 million for the quarterly period, on lowered charter rates.
However, due to higher profit contributions from shipyard operations partially offset by losses from shipping operations, the company’s gross profit was up by 22.3 percent from USD 73 million in the first quarter of 2015 to USD 89.3 million in the corresponding period of 2016.
The group recorded net loss attributable to equity holders of the Company of USD 14.4 million in the first quarter compared to net profit of USD 0.8 million a year earlier, weighed down by losses in shipping operations.
“Pressing forward, we must keep our fingers firmly on the pulse of the market, remain agile and leverage on our strengths and competitive advantages to tide through this difficult time,” Wu Zi Heng, Vice Chairman and President, said.
As at 31 March 2016, COSCO said that its order book stood at USD 7.6 billion with progressive deliveries up to 2018, adding that, as the weak global economy and depressed shipbuilding and offshore markets continue to persist, the company “expects operating margins on new ship building and offshore contracts to continue facing severe downward pressure notwithstanding any gains in our group’s efficiency and productivity.”
