The Straits Times / The Business Times News on Cosco

Cosco Corp wins US$106m conversion contracts

Deals include VLCC, and Suezmax-sized and oil tanker conversions

COSCO Corp Singapore, the ship repair and bulk carrier unit of China's largest shipping company, said yesterday it has won conversion contracts totalling US$106 million (S$165 million).

High-yielding orders: Cosco Corp's subsidiary Cosco Shipyard secured six projects, which will be carried out at its shipyards in Dalian (above), Nantong and Zhousan.

The Singapore company's 51 per cent-owned subsidiary, Cosco Shipyard Group, secured six projects, which will be carried out at its shipyards in the Chinese cities of Dalian, Nantong and Zhousan, it told the Singapore Exchange.

The six contracts, valued at US$5 million to US$38 million each, include: a very large crude carrier (VLCC) double-hull conversion; six roll-on, roll-off (roro) vessel conversions; two Suezmax-sized tanker double-hull conversions; repair of a badly damaged container vessel; a container vessel conversion; and two oil tanker conversions.

'We expect to see more conversion projects in 2007,' Cosco Singapore president Ji Hai Sheng said. 'These conversion projects will contribute significantly to the group's earnings.'

Mr Ji said earlier that he expects the high-yielding orders, driven by rising energy demand and new shipping regulations, to boost revenue and profits this year.

The company, which is winning more contracts for repairs and conversions of vessels that give higher margins, last month reported a 13th straight quarter of profit growth.

Net profit for the third quarter ended Sept 30 rose 26 per cent year on year to $71.5 million, or 3.23 cents a share, from $56.6 million, or 2.58 cents a share.

Singapore's SembCorp Marine owns 30 per cent of the enlarged Cosco Shipyard Group.

Shares of Cosco Corp Singapore climbed eight cents, or 4 per cent, to $2.09 as of the close of trading yesterday. The stock, which almost doubled in value this year, is the best performer among the 49-member benchmark Straits Times Index this year.