Login ID:
Partner Login
Contact Us : 7066511911

HK Bourse: Results Announcement From Cosco International Holdings Ltd. -12-

23 Mar 2017 4:22 am
    customers while maintaining the ship repairing projects from major and quality 
    customers, with a view to deepening the development of other potential markets. During 
    the year, sales volume of Jotun COSCO's coatings for new build vessels amounted to 
    52,082,000 litres, representing a decrease of 17% as compared to 2015. Sales volume of 
    coatings for repair and maintenance was 16,671,000 litres, representing a decrease of 19% 
    as compared to 2015. The sales volume of Jotun COSCO's marine coatings amounted to 
    68,753,000 litres (equivalent to approximately 92,814 tonnes) (2015: 83,436,000 litres 
    (equivalent to approximately 112,639 tonnes)), representing a decrease of 18% as 
    compared to 2015. During the year, the Group's share of profit from Jotun COSCO was 
    HK$88,236,000 (2015: HK$107,333,000), representing a decrease of 18% as compared to 
    2015, which was mainly attributable to the decrease in sale volume of marine coatings. 
    In addition, as at 31st December 2016, Jotun COSCO had coating contracts on hand for 
    new build vessels amounting to 34,690,000 dead weight tonnages pending delivery. The 
    coatings were scheduled to be delivered in the coming three years, which guaranteed 
    steady development of Jotun COSCO's future business. 
                                       - 27 - 
     1.5 Trading and Supply of Marine Fuel and Related Products 
         Sinfeng Marine Services Pte. Ltd., a wholly-owned subsidiary of the Company ("Sinfeng"), is 
         primarily engaged in the supply of marine fuel, trading and brokerage services of marine fuel 
         and related products. Currently, its business network primarily covers major oil ports such as 
         Singapore and Malaysia. During the year, Sinfeng adopted prudent business strategies by 
         conducting business with reputable customers in order to establish stable and long-term 
         business cooperation in response to the complex market environment. During the year, total 
         sales volume of marine fuel products was 2,114,548 tonnes, increased by 84% as compared 
         with 1,146,911 tonnes in 2015. 
         Revenue from the marine fuel and other products segment was HK$4,766,546,000, 
         significantly increased by 71% as compared with HK$2,779,986,000 in 2015, which was 
         mainly attributable to the increase in sales volume during the year as compared to 2015. 
         Double Rich, in which the Group owns 18% equity interest, is principally engaged in the 
         trading of fuel and oil products and marine fuel supply services in Hong Kong and also in 
         sourcing products such as light diesels and fuel oil. Its major customers are shipowners and 
         ship operators. During the year, the Group's share of profit from Double Rich was 
         HK$9,094,000 (2015: HK$10,237,000), down by 11% as compared to 2015, which was 
         mainly due to the decline in investment gain during the year. 
         Profit before income tax from marine fuel and other products segment was HK$12,048,000 
         (2015: HK$12,131,000), representing a slight decrease of 1% as compared to 2015, which was 
         mainly attributable to the decrease in share of profit of an associate. 
2.   General Trading 
      (COSCO International Trading Company Limited*), a wholly-owned 
     subsidiary of the Company ("CITC"), is principally engaged in the trading of asphalt and other 
     comprehensive trading. 
     During the year, faced with the sluggish domestic macro economy, tight funding for infrastructure, 
     the continuously fluctuating crude oil market and the market condition under increasingly fierce 
     competition, CITC endeavored to maintain its market shares in areas where it has obtained 
     advantages in bidding and tendering, including Guangxi, Yunnan, Guizhou, Hunan, etc., and 
     focused on exploring new markets, such as Anhui, Jiangsu and Inner Mongolia, etc. CITC made 
     use of the advantages of resources and logistics and successfully bidded the asphalt supply project 
     for the expressway within the Anhui Province and therefore has tapped into the market of such 
     area. In respect of the non-tender business, CITC continued to vigorously develop end customers, 
     and gradually participated in urban infrastructure and asphalt retail areas while ensuring the risk 
     control so as to expand business scope and seek new profit drivers. By leveraging such strategies, 
     CITC had achieved remarkable success in exploring retail business in the Eastern China region 
     market. In addition, CITC also has gradually set up a relatively stable supply system of imported 
                                                 - 28 - 
    and domestic asphalt by enhancing the cooperative relationships with the well-known domestic and 
    foreign resource suppliers, thereby further enhanced its ability in the integration of resource 
    allocation and contributed to the development of asphalt supply business. During the year, the 
    sales volume of asphalt of CITC amounted to 181,177 tonnes, representing an increase of 5% as 
    compared to 173,061 tonnes in 2015. 
    During the year, revenue from general trading segment was HK$768,387,000 (2015: 
    HK$836,624,000), down by 8% as compared to 2015, which was mainly due to lower selling 
    prices of asphalt which offset the increase of sales volume. Segment profit before income tax was 
    HK$4,530,000 (2015: HK$23,143,000), representing a significant decrease of 80% as compared to 
    2015. It was mainly attributable to the reversal of provision for impairment of other receivables of 
    HK$18,662,000 resulted from successful collection of other receivables in default in 2015. 
On 28th November 2016, the Company entered into a share purchase agreement with COSCO 
SHIPPING Financial Holdings Co., Limited and China Merchants Hoi Tung Trading Company Limited 
in relation to the acquisition of 100% equity interest of CSHT Marine at a cash consideration of 
HK$118,400,000 (the "Acquisition"). Details of the Acquisition were set out in the Company's 
announcement dated 28th November 2016 and the circular dated 12th December 2016. The Acquisition 
was approved by independent shareholders at the special general meeting of the Company held on 30th 
December 2016, and was completed on 1st January 2017. 
According to the International Monetary Fund, the global economic growth in 2017 is forecast to be 
3.4%, which is higher than that of 2016. The escalation of the global economic growth will provide 
better support and boost for the growth of demand in shipping market. China's economic growth may 
be slightly slower but it will still operate within an appropriate range. Although the overall imbalance 
between the supply and demand in the shipping sector still exists, it will be relieved somehow. The 
shipping market is on the rise, it will become more and more rational, and the structural recovery of the 
industry will further enhance market confidence. In particular, the further promotion of China's "Go 
Global" strategy and "One Belt and One Road" initiative will present enormous opportunities for 
China shipping enterprises to develop new markets. Adhering to the "shipping services industrial 
clusters" strategic guidance, COSCO SHIPPING International remains committed to optimising the 
industrial chain of shipping services and improving the service level of shipping related industries, in 
accordance with the overall strategy of COSCO SHIPPING Group. Through continuous effort, it will 
push forward the transformation and upgrading, make progress while maintaining stability to maximise 
the value of the enterprise. 
On one hand, the Group will be committed to establishing of "shipping services industrial cluster" in 
line with the development strategy of COSCO SHIPPING. The Group will fully capitalise on its 
strength, further refine the business coverage of shipping services and optimise its services boundary 
and scope. It will also make use of the assets consolidation opportunity of COSCO SHIPPING Group 
                                                 - 29 - 
to consolidate assets of other shipping service businesses within the Group. The Group will facilitate 
the expansion and development of the products and services in order to explore new business sectors of 
shipping services. In the meantime, the Group will make efforts to expand business outside the Group 
and inject potential projects, which are outside COSCO SHIPPING Group and are relevant to the 
existing business, in due course, so as to expand the business footprint of the Group. 
On the other hand, all the business units of COSCO SHIPPING International will proactively respond 
to market changes while being committed to expanding business chains according to their own 
circumstances, so as to improve the profitability of each segment. 
For the ship trading agency services, COSCO SHIPPING (Hong Kong) Ship Trading will strengthen its 
market research, endeavour to co-ordinate with the shipyards and shipowners and keep improving its 
services to ensure smooth delivery of new build vessels amidst sluggish global economy and the 
downtrend of ship building market. Meanwhile, it will widen its horizons, actively explore business 
outside COSCO SHIPPING Group and further diversify its businesses by expanding into the business 
areas throughout the whole life cycle of vessels, such as consultation on ship technology, consultation 
on ship trading and supervision of shipbuilding progress, with a view to laying a solid foundation for 
the future development of COSCO SHIPPING (Hong Kong) Ship Trading. 

(MORE TO FOLLOW) Dow Jones Newswires

March 23, 2017 00:22 ET (04:22 GMT)
Top 5 Special Reports
USD/INR (Jun. 20) Trading Near a Key Support Zone (7...
USD/INR (Jun. 20) Signs of a Bearish Breakout (Below...
USD/INR (Jun. 20) Testing the Lower End of a Multi-W...