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Cosco Corporation Singapore net loss $483.8 million

Staff writer |
Cosco Corporation Singapore recorded net loss attributable to equity holders of $483.8 million on turnover of $725.5 million in Q4 2015.




Group turnover decreased by 20.8% to $725.5 million in Q4 2015 from $91

5.8 million in Q4 2014 owing to decrease in shipyard and shipping revenue. Turnover from shipyard operations decreased by 20.6% to $716.3 million in Q4 2015 from $902.3 million in Q4 2014, mainly owing to lower revenue contribution from marine engineering and shipbuilding, partially offset by an increase in revenue from ship repair.

Cosco Corporation Singapore delivered 1 bulk carrier from COSCO Zhoushan shipyard in Q4 2015.

Turnover from dry bulk shipping and other businesses decreased by 31.6% from $13.5 million in Q4 2014 to $9.2 million in Q4 2015. The BDI averaged 640 points for Q4 FY 2015, which was a 42.9% decrease from the average of Q4 2014 of 1,120 points.

Shipyard business remained the biggest revenue contributor, forming 99.0% of Group turnover in Q4 2015.

Gross loss for Q4 2015 is $336.1 million, as compared to gross profit of $46.7 million in Q4 2014 due to losses from shipyard operations which incurred higher inventory write-downs, and losses from shipping operations due to the lower charter rates.

Write-down of inventories increased by $178.6 million from Q4 2014 to $289.0 million in Q4 2015 mainly due to the impairment made for DP3 Deepwater Drillship (DDD), which is presently available for lease or sale.

Compared to Q4 2014, other income decreased by 8.0% to $22.0 million in Q4 2015 mainly due to lower sales value of scrap materials and lower interest income.

Administrative expenses increased by $269.8 million to $340.3 million mainly due to the increase in allowance for impairment of trade and other receivables of $278.6 million to $304.6 million, and this relates mainly to construction contracts on modules of drillship and FPSO for certain Brazilian customers with uncertainties in their project status.

Interest expense increased by 30.7% to $43.8 million in Q4 2015 owing to higher bank borrowings procured to fund shipyard operations.

Overall, the Group recorded net loss attributable to equity holders of the Company of $483.8 million in Q4 2015 compared to net loss of $13.2 million in Q4 2014.

FY 2015

Cosco Corporation Singapore recorded net loss attributable to equity holders of $570.0 million on turnover of $3.5 billion in 2015.

Group turnover decreased by 17.4% to $3.5 billion in 2015 from $4.3 billion in 2014 owing to decrease in shipyard and shipping revenue.

Turnover from shipyard operations decreased by 17.3% to $3.5 billion in 2015 from $4.2 billion in 2014, mainly owing to lower revenue contribution from marine engineering, partially offset by an increase in revenue from ship building and ship repair.

Cosco Corporation Singapore delivered 21 projects in 2015. COSCO Zhoushan shipyard delivered 1 platform supply vessel and 7 bulk carriers; COSCO Guangdong shipyard delivered 2 bulk carriers, 2 anchor handling tug supply vessels and 3 platform supply vessels; COSCO Dalian shipyard delivered 1 oil tanker and 2 platform supply vessels and COSCO Nantong shipyard delivered 1 floating accommodation unit and 2 semisubmersible accommodation vessels.

Turnover from dry bulk shipping and other businesses decreased by 25.0% from $52.5 million in 2014 to $39.4 million in 2015.

The BDI started the year 2015 at 771 points and ended the year at 478 points. The BDI averaged 718 points for FY 2015, which was a 35.0% decrease from the average of 2014 of 1,105 points. Currently, the Group's dry bulk shipping fleet comprises Panamax and Handymax carriers.

Shipyard business remained the biggest revenue contributor, forming 98.9% of Group turnover in 2015.

Gross loss for 2015 was $214.8 million, compared to gross profit of $291.0 million due to losses from shipyard operations which incurred higher inventory write-downs, and losses from shipping operations due to the lower charter rates.

Write-down of inventories increased by $184.8 million to $309.3 million in 2015 mainly due to the impairment made for DP3 Deepwater Drillship (DDD), which is presently available for lease or sale.

Compared to 2014, other income decreased by 23.9% to $81.4 million in 2015 mainly due to lower sales value of scrap materials and lower interest income.

Administrative expenses increased by $348.8 million to $522.5 million mainly due to the increase in allowance for impairment of trade and other receivables of $354.5 million to $380.3 million, and this relates mainly to construction contracts on modules of drillship and FPSO for certain Brazilian customers with uncertainties in their project status.

Interest expense increased by 30.7% to $166.9 million in 2015 due to higher bank borrowings used to fund shipyard operations.

Overall, Cosco Corporation Singapore recorded net loss attributable to equity holders of the Company of $570 million in 2015 compared to net profit of $20.9 million in 2014 due to losses in shipyard and shipping operations. Cash and cash equivalents remained almost unchanged at $1.6 billion.

Trade and other receivables increased $634 million to $5.2 billion mainly due to higher construction contracts due from customers in the marine engineering segment, partially offset by a decrease in advances paid to suppliers (from $494.7 million to $262.2 million).

Trade and other payables decreased $214.7 million to $2.4 billion mainly due to lower accruals for operating expenses and a decrease in advances received from customers (from $364.9 million to $241.9 million).

Total borrowings increased by $1.6 billion to $6.5 billion due to additional funding procured to finance shipyard operations.

Shareholder's equity decreased by $545.7 million mainly due to the transfer of 2015 loss to retained earnings and payment of dividends in May 2015, partially offset by increase in currency translation reserve.


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