In a profit guidance to the Singapore Exchange (SGX) Cosco Corp said it expected to report a net loss in the third quarter of 2015 compared to a profit in the same period a year earlier.
Cosco Corp said the expected loss was due to the lower oil price impacting the offshore industry, the slump in shipbuilding that has hit its shipyards, and the languid dry bulk market putting great pressures on is dry bulk fleet.
“As a result of adverse market conditions, in third quarter ended 30 September 2015, the Company’s shipyards incurred higher costs for a few delayed projects as well as writedowns of certain inventory. Provisions for impairment of trade receivables have also been made,” the company said.
Cosco Corp owns a 51% stake in Cosco Shipyard Group. The company plans to release its Q3 results on 12 November, and its stock is currently suspended due to the ongoing merger talks between its parent Cosco Group and China Shipping.
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