COSCO shipping Trims Loss, Bearish on Outlook

COSCO Shipping International (Singapore), an offshore marine engineering, shipbuilding, and dry bulk shipping group, recorded a net loss of SGD 20.8 million in Q2 2017, down from a net loss of SGD 36.8 million in Q2 2016.

News ID: 75548

Date: 13 August 2017 - 14:23

The losses were ascribed mainly to woes in shipyard and shipping operations, MANA correspondent reported.

Turnover from shipyard operations decreased by 31.6% to SGD 516.1 million in Q2 2016, from SGD 754.6 million in Q2 2016; mainly owing to lower revenue contribution from ship repair, ship building and marine engineering.

Turnover from dry bulk shipping and other businesses increased by 4.7% from SGD 8.3 million in Q2 2016 to SGD 8.7 million in Q2 2017 as the current short-term rates were higher than the charter rates secured in Q2 2016.

Group turnover decreased by 31.2% to SGD 524.7 million in Q2 2017, from SGD 762.9 million in Q2 2016, owing to decrease in shipyard revenue.

As at 30 June 2017, the group’s gross order book stood at approximately USD 5.8 billion with progressive deliveries up to 2020. These include modules of drillship and FPSO contracts for Brazilian customers which amount to approximately USD 951 million.

New orders received in Q2 2017 include 1 FRSU module, and 3 container vessels.

“These orders were secured at low contract values due to the weak global economy and depressed shipbuilding and offshore markets. The group expects operating margins on new ship building and offshore contracts to continue to be subject to severe downward pressure as these conditions continue to prevail,” COSCO said.

The group added that it expects difficult and challenging business and operating conditions to persist or even worsen. As such, 2017 is expected to remain a very difficult year.