Cosco Corp's full-year net tumbles 71%

COSCO Corp's net profit for the full year ended Dec 31, 2013, slid 71 per cent to $30.6 million from $105.7 million.

This came on the back of a 6 per cent decline in revenue to $3.51 billion and a 34 per cent fall in gross profit to $321.2 million.

The fall in turnover was largely due to lower shipyard revenue, said the mainboard listed group which deals in offshore marine engineering, shipbuilding, ship repair and conversion, and dry bulk shipping.

Turnover from shipyard operations fell 6.1 per cent to $3.5 billion from $3.7 billion a year ago, as a result of lower revenue contribution from the ship repair and shipbuilding segments. This more than offset the growth in revenue from the marine engineering segment.

Turnover from dry bulk shipping and other businesses inched up 3.6 per cent, from $53.7 million to $55.6 million.

Earnings per share fell from 4.72 cents to 1.37 cents, while net asset value rose from 57.23 cents to 59.65 cents as at end-December.

As at Dec 31, the group's order book stood at US$7.8 billion with progressive deliveries up to 2016.

Cash and cash equivalents increased from $1.7 billion to $2 billion, mainly due to an increase in bank borrowings procured to finance shipyard operating activities.

Looking ahead, operating margins on new shipbuilding projects are expected to continue to be under great pressure, said Wu Zi Heng, vice-chairman and president. This is because the shipbuilding contracts the group is beginning construction on were secured since 2011 at low contract values due to the slumping shipping market at that time.

"With the many uncertainties still clouding the global economy, our group is prepared for a marketplace fraught with limited visibility. We will continue to increase our competitiveness by improving productivity and capability to help the group mitigate adverse industry conditions," said Capt Wu.

A dividend of one per ordinary share was proposed, versus two cents per ordinary share in the previous financial year.

Cosco's counter closed half a cent lower at 70.5 cents yesterday.