Cosco Shipping FY2018 net profit plummets 93% to S$13m

IN the absence of profit from discontinued operations, Mainboard-listed Cosco Shipping International (Singapore) saw net profit fall 93 per cent to S$13 million for the year ended Dec 31, down from S$189.4 million the year before, the firm announced on Friday after the market closed.

Profit from continuing operations was S$16.9 million in FY2018, reversing the loss from continuing operations of S$26.6 million in FY2017.

Cosco Shipping became a logistics management service provider with the acquisition of Cogent Holdings in FY2018. This followed the disposal of its China shipyard business in FY2017. For these discontinued operations, the group recorded net profit of S$92.4 million in FY2017, taking into account a S$299.2 million one-off gain recognised on the disposal of subsidiaries.

Earnings per share (EPS) for FY2018 were 0.58 Singapore cent. This compares to 8.46 Singapore cents the previous year - an overall figure comprising a loss per share from continuing operations of 1.22 Singapore cents, and EPS from discontinued operations of 9.68 per share.

No dividend was declared.

Revenue for FY2018 was S$163.7 million, more than four times the previous year's figure of S$37.2 million. This was due mainly to a turnover of S$132.5 million from the company's newly-acquired logistics businesses, offset by a decrease in shipping revenue from its reduced fleet of three bulk carriers.

Through wholly-owned unit Cogent, the company has a logistics network in Singapore, Malaysia and Indonesia. Cosco Shipping said in its results release that it aims to expand its logistics network in South and South-east Asia through acquisitions and investments.

The firm's ultimate holding company, China Cosco Shipping Corporation, has a logistics business network throughout China. Cosco Shipping said it intends to tap this existing network "to potentially develop new business opportunities in the logistics sector in South and South-east Asia", taking advantage of China's Belt and Road Initiative.

Cosco Shipping shares closed down 0.5 Singapore cent or 1.39 per cent at 35.5 Singapore cents on Friday before the results release.