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Cosco's FY2014 profit drops 32%

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Cosco Corp (Singapore) posted a 32 per cent drop in its 2014 net profit to S$20.9 million from S$30.6 million in 2013.

Cosco Corp (Singapore) posted a 32 per cent drop in its 2014 net profit to S$20.9 million from S$30.6 million in 2013.

The shipbuilding and shipping company reported a 21 per cent surge in revenue to S$4.26 billion, supported by increase in shipyard revenue.

The group declared cash dividend of 0.5 cents per ordinary share (one-tier tax) for the current financial period and one cent per ordinary share (one-tier tax) for the immediately preceding financial year. Earnings per share for the year fell to 0.93 cents from 1.37 cents in the previous year.

Turnover from shipyard operations increased by 21.9 per cent to S$4.2 billion in 2014 from S$3.5 billion in 2013, owing mainly to growth in revenue from marine engineering and ship building segments.

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The group delivered eight bulk carriers in 2014. Of these, Cosco Dalian shipyard delivered four bulk carriers, while Cosco Zhousan and Cosco Guangdong shipyard delivered two bulk carriers each.

Turnover from dry bulk shipping and other businesses decreased marginally by 5.6 per cent from S$55.6 million in 2013 to S$52.5 million in 2014. The group's shipyard business remained the biggest revenue contributor, forming 98.8 per cent of its turnover in 2014.

Gross profit decreased 9.4 per cent from S$321.2 million in 2013 to S$291.0 million in 2014 mainly due to higher inventory write-downs. On January 9, the group announced that the management of Cosco Nantong decided to discontinue the Octabuoy hull and topside module project with ATP Oil and Gas (UK) Limited - a company in voluntary arrangement (CVA) in the United Kingdom. This resulted in a one-off charge of S$91.4 million in FY2014.

As at 31 December 2014, the Group's order book stood at US$ 8.4 billion with progressive deliveries up to 2017.

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