Cosco Corp full year profit falls 71%

Net profit for 2013 was recorded at SGD30.62m ($24.19m), falling sharply by 71% compared to a profit of SGD105.69m in 2012.

Cosco Corp blamed the fall in profit to inventory write-down and provisions for expected losses from its shipbuilding and marine engineering businesses.

The Singapore-listed company posted a 6% year-on-year decrease in revenue to SGD3.51bn on lower ship repair and shipbuilding earnings in spite of higher marine engineering and shipping revenues.

“With the many uncertainties still clouding the global economy, our group is prepared for a marketplace fraught with limited visibility. We will continue to increase our competitiveness by improving productivity and capability to help the group mitigate adverse industry conditions,” said Wu Ziheng, vice chairman and president of Cosco Corp.

As at 31 December 2013, the group's orderbook stood at $7.8bn with progressive deliveries up to 2016.

As the group continues construction in 2014 on new ship building contracts that were secured since 2011 at low contract values due to the slumping shipping market then, the group expects operating margins on these new shipbuilding projects to continue to be under great pressure notwithstanding improving gains in efficiency and productivity.