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Cosco Corp Singapore : Full Year Results For The Financial Year Ended 31 December 2011

Friday, 24 February 2012 | 00:00
Singapore Exchange ("SGX") mainboard-listed COSCO Corporation (Singapore) Limited ("COSCO" or the "Company"), a leading ship repair & marine engineering and shipping group, yesterday announced its financial results for the year ended 31 December 2011.
Group turnover registered an 7.8% increase to $4.2 billion in FY2011 boosted by higher revenue from the Group's shipyard operations. Shipyard turnover rose 10.1% to
$4.1 billion on the back of higher progressive revenue recognition for the Group's ship building and marine engineering projects. This more than offset the 52.9% lower turnover from dry bulk shipping business of $66.8 million in FY2011 due to lower charter rates.
Gross profit decreased 20.0% from $476.1 million in FY2010 to $380.8 million in FY2011 mainly due to lower dry bulk shipping income led by lower BDI and higher operational costs in shipyard business. The rising cost environment and higher tax expenses (due to lower tax-exempt shipping profits and a deferred tax benefit recognized) resulted in the overall 43.9% fall in net profit attributable to equity holders of the Company from $248.8 million in FY2010 to $139.7 million in FY2011.
Capt. Wu Zi Heng, Vice Chairman and President of the Company said, "We expect business and operating conditions to become even more difficult and challenging in FY2012 amidst the fragile global economy exacerbated by the sovereign-debt crisis in Europe. There may be greater pressure on the prices of new vessels as our customers may be reluctant to commit new orders for vessels in the short term. The rising cost pressure may also affect our operating margins though cushioned by our improving productivity."
As at 31 December 2011, the Group's order book stood at US$6.1 billion with progressive deliveries up to first half 2014. This order book is subject to revision from any new orders or cancellation of orders that may arise.
New orders received in 2011 amounting to US$2.0 billion include 2 (82,000 dwt) bulk carriers, 4 special purpose carriers, 3 self erecting tender drilling rigs, 2 jack-up drilling
rigs, 2 Sevan 650 drilling units, 1 semisubmersible barge and 1 Octabuoy topside 2
module. In 2011, the Group successfully delivered a total of 34 bulk carriers, 2 windmill turbine installation vessels, 2 multipurpose heavy lift carriers, 2 (5,000 units) car carriers and 3 shuttle tankers.
Capt. Wu added, "Currently already one of the largest offshore and marine engineering group in the PRC with 14 outstanding offshore marine projects as at 31 December
2011, our Group aims to enhance our offshore marine engineering offerings. Our order book includes 1 deep-water drillship, 1 semi-submersible barge, 1 wind turbine installation vessel, 1 shuttle tanker, 2 semi-submersibles, 2 jack-up rigs, 3 Sevan 650 drilling units and 3 tender rigs. As we scale the "learning curve" in offshore marine engineering projects on new product types, our Group will grow in expertise and capabilities to reach out to a broader customer base, solidifying our foundation for long-term sustainable growth in offshore and marine engineering operations."
The Group will maintain focus on deliveries as it upgrades its shipyard capabilities and efficiencies and monitor costs. It will also continue to leverage on the strength of its diversified business to remain competitive and fortify its strategic market position.
Source: COSCO Corporation (Singapore) Ltd
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