Cosco (S) unveils massive S$484m Q4 loss

MAINBOARD-LISTED Chinese shipbuilder Cosco Corporation (Singapore) reported a massive S$484 million loss for its fourth quarter, dragging full-year losses to S$570 million.

The loss was due to S$289 million of inventory write-downs mainly due to a completed deepwater drillship that a customer terminated taking delivery of in 2013, and S$305 million worth of allowances for impairment for payments owed by Brazilian customers.

Fourth quarter revenue fell 21 per cent to S$725.5 million while full-year revenue fell 17 per cent to S$3.5 billion.

Cosco Singapore vice-chairman and president Wu Zi Heng said in a press release that the global offshore market continued to slow down significantly with no signs of improvement.

"Amidst persistent weakness in the state of the global economy and depressed crude oil prices, the group continues to face adverse unfavourable market conditions," he said.

"Against the backdrop of these difficult and challenging business and operating conditions, which is likely to persist and even worsen in 2016, our Group will capitalise on the downturn to improve our capabilities for long-term sustainable growth in our offshore marine engineering and new shipbuilding operations."

Cosco's order book stood at US$8 billion at end-2015, but the company noted that the amount is subject to cancellation or rescheduling of orders.

The counter closed at S$0.32, up a cent, before results were announced.