COSCO – Annual Results

Press Release March 23, 2012

Cosco International reports stable profit growth in 2011, but outlook not optimistic for overall shipping market in 2012

Revenue rose by 23% to HK$10,656,121,000. Gross profit increased by 25% to HK$892,035,000. Overall average gross profit margin stood at 8%.
Steady core profit growth: profit before income tax from shipping services business increased by 19% to HK$487,770,000. Profit before income tax from coatings, marine equipment and spare parts, and insurance brokerage business segments increased by 58%, 36% and 6% respectively.
Due to the Group's disposal of its entire shareholding in SOLHL in December 2010, the Group's results for the year no longer included items in relation to the investment and disposal of shareholding in SOLHL. Profit attributable to equity holders of the Company, therefore, declined by 69% to HK$390,339,000. If items in relation to the investment and disposal of shareholding in SOLHL were excluded from 2010 results, profit attributable to equity holders of the Company would have increased by 36% on the same basis.
Basic earnings per share was 25.80 HK cents. The Board has recommended a final dividend of 7 HK cents per share. Together with the interim dividend of 2 HK cents per share, the total dividends of 9 HK cents per share represented a dividend payout ratio of 35%.
Strong cash position to support future development: the Group had net cash of HK$5,668,823,000 as at 31st December 2011.

Outlook

In 2012, the outlook of the overall shipping market is still not optimistic. On one hand, weaker consumption in developed countries will slow down the growth of global trading volumes; on the other hand, overcapacity will remain unfavorable to the shipping market because of a large amount of new build vessels to be delivered.

Mr. Ye Weilong, Chairman of COSCO International commented, "Facing excess capacity in the global shipping market, surging oil prices and environmental protection requirements raised by International Maritime Organization, shipowners have to improve operating efficiency and reduce operating costs to enhance their profitability.