Cosco Shipping swings to S$2.83m Q1 profit

COSCO Shipping International posted a fiscal first-quarter profit attributable to equity holders of S$2.83 million, compared to a loss of S$78.93 million in the previous corresponding quarter, helped by revenue from newly-acquired Cogent Holdings and its 40per cent stake in PT Ocean Global Shipping.

This was despite its cost of sales up nearly threefold to S$30.58 million from S$11.28 million, due to its newly acquired logistics businesses.

Cosco's turnover surged to S$40.65 million, up from S$11.41 million a year ago, which was tempered by a decrease in shipping revenue from a reduced fleet of three bulk carriers.

Cosco also recognised other gains of S$3 million in Q1 2018, from a loss of S$7.3 million in the previous year, due mainly to foreign exchange gains.

Cash and cash equivalents increased to S$355 million from S$58.5 million, lifted by the proceeds from the disposal of subsidiaries and increase in borrowings, which were partially offset by the net cash out flow for the acquisition of its newly-acquired logistics businesses.

Cosco on Jan 2, 2018 took control of Cogent Holdings Limited following the acquisition of more than 90 per cent of Cogent's issued shares through a voluntary conditional cash offer to acquire 100 per cent equity interest in Cogent for a S$488.07 million consideration. The acquisition was completed on March 6, with Cogent subsequently becoming a whollyowned subsidiary of Cosco's.

The company is aiming to expand its logistics network in South and South-east Asia through acquisitions and investments and is researching "potential targets to acquire" and investment opportunities, taking into consideration the targets' business scale and scope, historical performance, growth potential and synergy with the group's operations, said Cosco's vice-chairman and president Gu Jing Song.

Cosco's counter ended trading on Tuesday at S$0.47 apiece, down 1.06 per cent or S$0.005.