The shipyard group is also anticipating operating margins on new shipbuilding projects to continue to be under great pressure due to construction in 2013 on contracts that were secured in 2010 to 2012 at low values, despite improving gains in efficiency and productivity.
“As global economic outlook remains cloudy, our group expects even more difficult and challenging business and operating conditions in 2013,” said Wi Ziheng, vice chairman and president of Cosco Corp (Singapore).
The ominous outlook is magnified by depreciation of the US dollar against the Chinese yuan and a potential rise in general Chinese wages, prices of raw materials as well as higher financing costs, and entry of new offshore players, all of which may exert greater downward pressure on operating margins.
The Singapore-listed company started the year with lower earnings as first quarter net profit plunged 65% year-on-year to SGD9.74m ($7.92m) while revenue declined 25% to SGD733m.
As at 31 March 2013, the company's orderbook stood at $6.4bn with progressive deliveries up to 2014. New orders received in the first quarter amounting to about $254m include one semi-submersible tender assist drilling rig and two platform supply vessels.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
