China Shipyards Contributed Best to COSCO's Q3 2012 Results

Press Release
Monday, November 05, 2012

The COSCO Group achieved net profit attributable to equity holders of $26.6 million on turnover of $937.0 million in Q3 2012.

Group turnover inched down 3.4% to $937.0 million in Q3 2012 from $969.8 million in Q3 2011 due to a decrease in shipyard and dry bulk shipping revenue.

Turnover from shipyard operations decreased marginally by 3.3% to $923.5 million in Q3 2012 from $954.7 million in Q3 2011 mainly due to lower revenue contribution from ship building & ship repair segments which more than offset the growth in revenue from marine engineering segment.

The Group delivered 10 bulk carriers in Q3 2012. Of these, COSCO Zhoushan and COSCO Dalian shipyard delivered 4 bulk carriers each while COSCO Guangdong shipyard delivered 2 bulk carriers. In addition, COSCO Nantong shipyard delivered one deep water semi-submersible drilling rig.

Turnover from dry bulk shipping and other businesses decreased by 11.2% from $15.2 million in Q3 2011 to $13.5 million in Q3 2012 as the current short-term rates were significantly lower than the more favorable charter rates received in Q3 2011.

Shipyard business remained the biggest revenue contributor, forming 98.6% of Group turnover in Q3 2012.

The Group maintains a cautious outlook for the rest of 2012 as the state of global economy remains fragile with persisting concerns over the economic situation in Europe, geopolitical uncertainties and weakening global economic growth. With excess capacity in the shipping industry and the uncertain global economic conditions against the backdrop of warnings from various bodies of a deterioration in global economic growth, including that in Asia, which may lead to a global recession, shipowners may be reluctant to place new orders for vessels and the Group may experience a decline in new orders in ship building and/or face greater downward pressure on operating margins.

Overall, the Group expects business and operating conditions for the rest of 2012 to remain difficult and challenging.

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