The Straits Times / The Business Times News on Cosco

Cosco's gains rise 30% on ship-repair boom

COSCO Corp (Singapore) said yesterday that its bottom line in the second quarter received a massive boost from its ship-repair and marine engineering business.

The China-based ship-repair and bulk-carrier group's net profit in the three-month period ended June 30 rose 30 per cent to $51 million from $39.4 million in the same period a year earlier.

This was largely driven by the 30 per cent rise in the group's ship-repair sales to $223.8 million in the second quarter from $171.7 million in the year-ago period. Bulk shipping sales increased 8 per cent in the quarter to $36.8 million from $34.2 million a year earlier.

Total group turnover in the second quarter rose 26 per cent to $265.35 million.

On a six-month basis, Cosco's first-half net profit rose 36 per cent to $88.6 million from $65.2 million in the same period last year. First-half group sales were up 42 per cent at $532.9 million.

Based on this performance, Cosco - which is a subsidiary of China's largest shipping group China Ocean Shipping - is now confident that it is on track to improve on last year's performance.

'The high-yield ship-repair, conversion and offshore marine engineering projects secured in the first six months of financial year 2006 have already far exceeded those secured in the whole of 2005, underscoring the group capabilities in the highly specialised offshore business,' Cosco vice-chairman and president Ji Hai Sheng said in a statement.

The group successfully bagged about $400 million worth of such high-yield projects in the first six months of this year, exceeding those secured in the whole of last year.

The group's earnings per share in the second quarter rose to 2.31 cents from 1.81 cents in the same period last year. Net asset value increased to 25.21 cents as at June 30, from 23.65 cents as at Dec 31. No dividend was declared.

Cosco shares yesterday closed at $1.53, up three cents.