The Straits Times / The Business Times News on Cosco

Cosco's quarterly profit surges to $57m

COSCO Corp Singapore, the only listed unit of China's biggest shipping company, yesterday reported record-breaking third-quarter results as profits jump four times.

A beaming Mr Ji Hai Sheng, its president, told a well-attended results briefing for analysts and the media held at the Fullerton Hotel that it was the company's best ever performance, thanks to increased demand for vessel maintenance.

Net profit for the three months ended Sept 30 surged to $56.6 million, or 5.17 cents a share, from a restated $11.3 million, or 1.04 cents a share for the same period last year.

Cosco Singapore's sales jumped to an all-time high of $235.1 million from $32.5 million.

The company said that the sharp increase in sales was fuelled by strong performances from core ship repair and dry-bulk shipping business.

Marine repair business accounted for 80 per cent of turnover in the latest quarter, compared with 3 per cent in the third quarter of last year.

Shipyard operations contributed $188.2 million in the third quarter. Average revenue per ship repaired was $1.4 million, up from $1.1 million, as more resources were devoted to repaid jobs, which yielded higher revenues.

With the acquisition of Cosco Shipyard, the company now owns 70.6 per cent of Cosco Dalian and 75.5 per cent of Cosco Nantong.

At the same time, the shipping business' contribution fell to 18 per cent of the turnover, as against 78 per cent in the same quarter a year earlier.

Shipping revenue was boosted by the addition of two new ships - MV Hai Hwang Xing and MV Ju Da - to the fleet in June and July respectively.

Mr Ji said at the results briefing that a 300,000 deadweight tonne floating dock had been commissioned at its shipyard in Dalian, China, last month, a week ahead of schedule.

This is the largest floating dock in China and one of the largest floating docks in the world. With the addition of this floating dock, Cosco will be able to repair very large vessels and thereby benefit from the high value added work.

He said that Cosco Singapore expects its full-year turnover and net profit to substantially exceed those of the previous years.