COSCO Corp Uncertain on Offshore Market Recovery, Profit Falls

COSCO Zhoushan Shipyard, image: COSCO

SINGAPORE, April 30 (Reuters) – Shipbuilder COSCO Corporation Singapore Ltd on Thursday posted a 94 percent slide in first-quarter profit, and said weak oil prices makes a recovery in the offshore marine market uncertain.

COSCO Corp, a subsidiary of Chinese state-owned maritime conglomerate China Ocean Shipping (Group) Company, posted a quarterly net profit of S$766,000 ($579,600), a slide from S$12.6 billion in the same year ago period.

Revenue also fell 4.6 percent to S$991.2 million, dragged by weak performance in dry bulk shipping and shipyard businesses.

Trade and other receivables, or money owed to the company, had risen to its highest in at least 12 years at the end of the quarter to S$4.9 billion ($3.71 billion), partly due to an increase in dues from customers in the marine engineering segment.

“New orders have declined since 2014 and some customers may delay accepting or refuse to accept delivery of vessels upon completion,” COSCO Corp said in the statement.

“The pace of any recovery from the current situation remains uncertain,” it added.

A over 40-percent slide in crude oil prices since mid-2014 has sapped new orders for offshore drilling rigs and support vessels, a sector Chinese shipbuilders such as COSCO Corp have expanded into over the past few years.

The company’s outstanding order book stood at $8.1 billion, a drop from $8.4 billion at the end of 2014, the company said.

($1 = 1.3216 Singapore dollars) (Reporting by Rujun Shen; Editing by Miral Fahmy)

(c) 2015 Thomson Reuters, All Rights Reserved

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