COSCO posts financial results for Q2 2016
COSCO Corporation (Singapore) Limited, a leading offshore marine engineering, shipbuilding, ship repair & conversion and dry bulk shipping group, today announced its 2 nd quarter financial results for the 3 months ended 30 June 2016. Group turnover decreased 10.6% to $762.9 million in Q2 2016 from $853.5 million in Q2 2015 owing to decreases in shipyard and shipping revenues.
Turnover from shipyard operations decreased 10.5% t o $754.6 million in Q2 2016 from $843.4 million in Q2 2015 on lower revenue contribu tion from marine engineering, partially offset by an increase in revenue from shi p building segment. The Group delivered 2 oil tankers, 2 module carriers and 1 li vestock carrier in Q2 2016. Turnover from dry bulk shipping and other businesse s decreased 17.8% from $10.1 million in Q2 2015 to $8.3 million in Q2 2016 as th e current short-term rates were lower than the more favorable charter rates secured in Q2 2015.
Gross profit decreased 80.5% from $59.0 million in Q2 2015 to $11.5 million in Q2 2016 due to lower profit contributions from its shi pyards and losses from shipping operations. Other income comprising gain from the disposal of s crap metal, interest income and others decreased by 25.9% to $14.7 million in Q2 20 16 mainly due to lower sales value of scrap materials and lower interest income. Administrative expenses decreased 60.3% to $13.0 million mainly due to net reversal of impa irment of trade and other receivables of $15.3 million.
Interest expense increased 30.9% to $52.6 million in Q2 2016 due to higher bank borrowings to fund shipyard operations. Overall, the Group recorded net loss attributable t o equity holders of the Company of $36.8 million in Q2 2016 compared to net loss of $4 .8 million in Q2 2015 due to losses in shipyard and shipping operations mainly attribut able to unfavourable market conditions. In 1H 2015, the group recorded net loss attributable to equity holders of the Company of $51.2 million in 1H 2016 compared to net loss of $4.0 million in 1H 2015.
As at 30 June 2016, the Group’s order book stood at approximately US$7.6 billion with progressive deliveries up to 2018. These include mo dules of drillship and FPSO contracts for certain Brazilian customers which amo unt to approximately US$1.4 billion. This order book is subject to revision fro m any new, cancellation, variation or scheduling of orders that may arise.
New orders received in 1H 2016 include 1 trailing suction hopper dredger, 1 self-elevating workover unit, 2 crude oil tankers and 4 container vessels. With the macroeconomic headwinds at the forefront o f its concerns, the Group expects these difficult and challenging business and operat ing conditions to persist or even worsen. As such, 2016 will remain a very difficult year for the Group.
About COSCO Corporation (Singapore) Ltd
Listed on the main board of the SGX, COSCO Corporat ion (Singapore) Ltd (“COSCO”) is a leading offshore marine engineering, shipbuilding, ship repair & conversion and dry bulk shipping group. The Group owns 51% of a large shipyard group in China, COSCO Shipyard Group, and a fleet of 10 dry bulk carriers. COSCO is the listed subsidiary of China Ocean Shipping (Group) Company.
