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COSCO International Announces 2014 Interim Results

Strong Profit Growth with Net Profit Up 45% YOY

HONG KONG, Aug. 19, 2014 /PRNewswire/ --

Financial Summary

For the six months ended/as at 30th June

2014

(HK$ mn)

2013

(HK$ mn)

Changes

(%)

Revenue

4,740

4,461

+6%

Gross profit

424

328

+29%

Operating profit

151

129

+17%

Profit attributable to equity holders

190

131

+45%

Basic earnings per share (HK cents)

12.57

8.65

+45%

Interim dividend per share (HK cents)

3.00

2.00

+50%

Results Highlights

  • Strong profit growth: profit attributable to the equity holders surged by 45% to HK$190 million. The growth was mainly driven by:
    • Marked increase of 103% YOY in ship trading agency's commission income with significant jump in volume of both scrapped ships and newbuild contracts, resulted from Chinese shipowners- accelerated fleet restructuring activity;
    • 68% YOY increase in finance income generated from the Group's cash on hand with higher bank deposit interest rates; and
    • Rebound of 374% YOY in profit contribution from the Group's joint venture, Jotun COSCO.
  • Dividend: the Board has declared an interim dividend of 3 HK cents per share, increased by 50% YOY.
  • Strong cash position: the Group had net cash of HK$6 billion as at 30th June 2014, which will support business expansion in the future.

Business Development Highlights

  • In August 2014, COSCO International's wholly owned subsidiary COSCO Yuantong completed acquisition of 51% equity interest in Yuan Hua in the USA from COSCO Americas. The acquisition, marked the initial establishment of COSCO International's global supply network of marine spare parts, will further enhance the Group's capability in procuring and supplying of marine equipment and spare parts in the Americas.
  • Jotun COSCO and COSCO Kansai continued to retain the No. 1 market share in Chinese marine coatings and container coatings markets in 1H2014. To strengthen their market leadership, the two joint ventures propelled the construction of their new plants this year. Jotun COSCO has substantially completed the construction of its new plant in Qingdao, currently in trial production, which can produce marine coatings of 67,500 tonnes annually. COSCO Kansai started construction of its new plant in Shanghai in March 2014, which is scheduled to commence production in 2015, with a maximum annual production capacity of 75,000 tonnes.
  • COSCO International is closely studying the expansion of new business in shipping services related areas.

Business Review

  • In 1H2014, as Chinese shipowners accelerated their fleet restructuring, the operating environment for shipping services businesses was improved. As a result, the Group's profit before income tax (PBT) from shipping services grew by 47% YOY to HK$221 million.
  • PBT from the three traditional shipping services for shipowners (i.e. ship trading agency, marine insurance brokerage and supply of marine equipment & spare parts) increased by 67% YOY to HK$127 million, contributed 51% of the Group's total PBT.
  • The coatings segment's PBT rebounded by 34% YOY to HK$82 million, accounted for 33% of the Group's PBT, mainly driven by the significant increase in profit contribution from the marine coatings producer Jotun COSCO on better gross profit margin and a one-off exchange gain upon liquidation of its subsidiary in Guangzhou.
  • PBT from marine fuel supply segment was HK$11 million, down by 14% YOY, accounted for 4% of the total PBT. The decrease was mainly caused by the declined share of profit from Double Rich, the 18% owned associate in Hong Kong.

Outlook

Mr. Sun Jiakang, Chairman of the Board of COSCO International, commented, "With the advantages of strong cash position, experienced professionals and a global service network, COSCO International will be seeing more development opportunities in existing and new business areas. As for existing business, COSCO International will ensure the steady growth of shipping services business segments, and, at the same time, deepen corporate transformation and upgrade so as to strengthen and improve the profitability of core business. As for expansion into new business, COSCO International will seize opportunities to further improve the construction of a global sales and service network, actively study on the new business development in shipping services related areas, as well as the upstream and downstream alongh the value chain of existing businesses. With the full support from COSCO Group, the Company will make every effort to achieve a leap in the business development as soon as possible, and create great returns for shareholders."

Editorial Note

The announcement of 2014 interim results is available on the website of the SEHK (www.hkexnews.hk) and the Company's website (www.coscointl.com). A webcast replay of the 2014 interim results analyst meeting will be available at the Company's website after 10:00pm, 19th August 2014.

Company Background

COSCO International Holdings Limited ("COSCO International") is listed on the main board of The Stock Exchange of Hong Kong Limited. Its stock code is 00517. COSCO International is a constituent of Hang Seng Corporate Sustainability Benchmark Index. In recent years, COSCO International has focused its strategic business position on the development of the shipping services business. It aims to become a global leading one'stop shipping services provider, offering professional services to shipowners worldwide. Its core businesses include ship trading agency, marine insurance brokerage, supply of marine equipment and spare parts, production and sale of coatings and trading and supply of marine fuel and related products. The headquarters of COSCO International is in Hong Kong and its businesses network cover China Mainland & Hong Kong, Singapore, Japan, Germany and the USA, etc. COSCO International is a listed company owned by COSCO (Hong Kong) Group Limited, which is a wholly-owned subsidiary of China Ocean Shipping (Group) Company ("COSCO"). COSCO Group is one of the major multinational conglomerates in the world, which focuses mainly on shipping, logistics, and ship building and repairing businesses as well as other shipping related businesses.

For enquiries, please contact:

Investor Relations Department of COSCO International

Yang Ling, General Manager

Tel: (852) 2809 7810

Fax: (852) 8169 0678

Email: yangl@coscointl.com

Candy Cheung, Deputy General Manager

Tel: (852) 2809 7706

Fax: (852) 8169 0678

Email: cheungky@coscointl.com

Crystal Lu, Senior Officer

Tel: (852) 2809 7820

Fax: (852) 8169 0678

Email: lul@coscointl.com




PR China Limited

Henry Chik / Vivian Cheung / Ivy Lu

Tel: (852) 2522 1838 / 2522 1368 / 2521 2823
Fax: (852) 2521 9955

Email: hchik@prchina.com.hk / vcheung@prchina.com.hk / ilu@prchina.com.hk

SOURCE COSCO International

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