SINGAPORE (Mar 1): Cosco Shipping International (Singapore) reported full-year earnings of $263.9 million in FY17 compared to a loss of $466.5 million a year ago.
In August 2017, the group's shareholders approved the sale of 51% stake in Cosco Shipyard Group Co., 50% stake in Cosco (Nantong) Shipyard Co. and 39.1% stake in Cosco (Dalian) Shipyard Co. for a consideration of $297.1 million.
Full-year group turnover from continuing operations decreased by 8.2% to $37.2 million for FY17 compared to FY16 mainly due to a decrease in shipping revenue from a smaller fleet of bulk carriers. Currently, the group’s dry bulk shipping fleet comprises three Handymax carriers, having scrapped seven bulk carriers by the end of FY17.
Gross profit for FY17 was $11.6 million as compared to gross loss of $6.0 million in FY16 mainly due to some recovery in the relatively low charter rates of bulk carriers and write-back of accrued owner’s expenses for vessels that have been scrapped.
Other losses increased by $21.5 million to $24.3 million for FY17 mainly due to the loss on disposal of property, plant and equipment.
On Nov 3 2017, the group announced that it had entered into a share sale and purchase agreement for the purchase of a 40% stake in PT Ocean Global Shipping for a consideration of $13.9 million in cash.
In its outlook, Cosco Shipping says the world dry bulk shipping market is still seeing excess tonnage and overall weak macroeconomic conditions. The Baltic Dry Index (BDI), which is a measure of shipping costs for commodities, started the year at 953 points and ended the year at 1,366 points.
For FY17, the BDI averaged 1,145 points which was a 70.1% increase from the average of 673 points in FY16. While there has been some recovery, such recovery was made from a very low base and the BDI remains at a relatively low level, adds Cosco Shipping.
Shares in Cosco Shipping International closed 7 cents higher at $3.41 on Thursday.
