COSCO International Announces 2012 Annual Results Stable Profit Performance in a Challenging Market

(SEHK Stock Code: 00517)

HONG KONG, March 21, 2013 /PRNewswire/ --

Financial Summary

For the year ended/ as at 31st Dec 

2012

2011

Change

Revenue (HK$ mn)

10,006

10,656

-6%

Profit attributable to equity holders (HK$ mn)

363

390

-7%

Basic earnings per share (HK cents)

23.98

25.80

-7%

Dividend payout ratio (%)

33

35

-2pts

Net cash (HK$ mn)

5,821

5,669

+3%

Net cash per share (HK$)

3.85

3.75

+3%

Results and Operation Highlights

  • Profit performance in a challenging market environment: Revenue decreased by 6% to HK$10 billion as compared to 2011. Profit attributable to equity holders of the Company declined by 7% year-on-year to HK$363 million.
  • Healthy operating cash flow and strong cash position: Net cash inflow generated from operating activities was HK$255 million in 2012. As at 31st December 2012, the Group had net cash of HK$5.8 billion to support future development.
  • Consistent dividend payout ratio: Basic earnings per share were 23.98 HK cents. The Board has recommended a final dividend of 8 HK cents per share. Together with the interim dividend of 2 HK cents per share, total dividends for 2012 will be 2 HK cents per share, representing a dividend payout ratio of 33%.
  • Service network development in Europe: A memorandum was signed on 18th March 2013 regarding an acquisition of the entire issued share capital of a subsidiary of COSCO Group in Germany for a consideration of not more than EUR1.2 million. The target company is engaged in the trading and installation of marine equipment and spare parts for vessels. The proposed acquisition will help strengthen COSCO International's presence in Europe in order to form a global marine spare parts supply service network and solidify its customer and supplier relationships in the region.
  • Market recognition: On 10th September 2012, COSCO International was selected as a constituent of the Hang Seng Corporate Sustainability Benchmark Index.

Business Review

  • In 2012, the continuous weakness in the shipping market pushed shipping companies to adopt the strictest cost control measures and to further postpone the new build vessel deliveries. In addition, demand for new container boxes slowed down in the second half of 2012. As a result, the Group's profit before income tax (PBT) from shipping services declined by 17% year-on-year to HK$403 million.  
  • PBT from the three traditional shipping services for shipowners (i.e. ship trading agency, marine insurance brokerage and supply of marine equipment & spare parts) declined by 21% to HK$189 million as compared to the previous year. They contributed 40% of the Group's total PBT. COSCO International completed preparations for the centralised procurement of marine spare parts and marine insurance to be implemented by COSCO fleets in the second half of 2012 and has become the sole agent for the provision of these shipping services to COSCO fleets since January 2013. This will not only further expand the business scale within COSCO Group, but also lay a good foundation for the Group to get more favorable terms from manufacturers and insurance companies due to greater business volumes and to explore more external customers and increase revenue base outside COSCO Group.
  • The coatings segment's PBT reached HK$159 million, accounting for 33% of the Group's total PBT and representing a 31% year-on-year decrease. The Group's two joint-ventures, namely Jotun COSCO and COSCO Kansai, increased their market shares in 2012. In order to further strengthen their leading positions in China's marine coatings and container coatings markets, Jotun COSCO and COSCO Kansai speeded up the construction of two new plants in Qingdao and Shanghai, which are expected to be completed in 2013 and 2014, respectively. 
  • PBT from marine fuel supply segment was HK$55 million, up 195% as compared with 2011. The increase was mainly due to the successful collection of outstanding trade receivables from a defaulting customer, which led to a reversal of the provision for impairment of trade receivables of approximately HK$29.7 million.

Outlook

Mr. Ye Weilong, Chairman of the board of directors of COSCO International, commented, "COSCO International will continue to work on establishing a global sales and service network, seeking acquisitions inside and outside COSCO Group, and exploring the upstream and downstream expansion along the existing value chain so as to achieve sustainable growth. With the full support from COSCO Group, COSCO International will continuously develop itself into a global leading one-stop shipping services provider, offering diversified and specialised shipping-related services and products to shipowners around the world, thereby maximising returns to shareholders."

Editorial Note

The announcement of 2012 annual results is available on the website of the SEHK (www.hkexnews.hk) and the Company's website (www.coscointl.com). A webcast replay of the 2012 annual results analyst meeting will be available at the Company's website after 10:00pm, 21st March 2013.

Company Background

COSCO International Holdings Limited ("COSCO International") is listed on the main board of The Stock Exchange of Hong Kong Limited. Its stock code is 00517. COSCO International was selected as a constituent of Hang Seng Corporate Sustainability Benchmark Index in September 2012. In recent years, COSCO International has focused its strategic business position on the development of the shipping services business. It aims to become a global leading one-stop shop service provider focusing on shipping services to provide professional services to shipowners worldwide. Its core businesses include ship trading agency, marine insurance brokerage, supply of marine equipment and spare parts, production and sale of coatings and trading and supply of marine fuel and related products. The headquarters of COSCO International is in Hong Kong and its businesses and service network cover China Mainland & Hong Kong, Singapore, Japan, and other major fueling ports worldwide. COSCO International is a listed company owned by COSCO (Hong Kong) Group Limited, which is a wholly-owned subsidiary of China Ocean Shipping (Group) Company ("COSCO"). COSCO is one of the major multinational conglomerates in the world, which focuses mainly on shipping, logistics, and ship building and repairing businesses as well as other shipping related businesses.

For enquiries, please contact:

Investor Relations Department of COSCO International

Yang Ling, General Manager

Tel: (852) 2809 7810

Fax: (852) 8169 0678

Email: yangl@coscointl.com

Candy Cheung, Deputy General Manager

Tel: (852) 2809 7706

Fax: (852) 8169 0678

Email: cheungky@coscointl.com



Tsoi Ching Chung, Manager
Tel: (852) 2809 7828
Fax: (852) 8169 0678
Email: tsoicc@coscointl.com

Crystal Lu, Officer
Tel: (852) 2809 7820
Fax: (852) 8169 0678
Email: lul@coscointl.com



PR China Limited

Henry Chik/ David Shiu/ Camille Xiong

Tel: (852)2522 1838 / 2522 1368/ 2521 2823

Fax: 2521 9955

Email: hchik@prchina.com.hk / dshiu@prchina.com.hk / cxiong@prchina.com.hk

SOURCE COSCO International Holdings Limited



RELATED LINKS
http://www.coscointl.com
http://www.hkexnews.hk

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