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COSCO SHIPPING Ports Limited
COSCO SHIPPING Ports Limited

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2006 interim results

Date:2006-09-07     Publish:本站

2006 Interim Results
 

The board of directors of COSCO Pacific Limited ("COSCO Pacific" or the "Company") is pleased to announce that the Company and its subsidiaries (the "Group") have delivered satisfactory interim results for the six months ended 30th June 2006.

  • Turnover rose by 5.9% to US$150,286,000
  • Profit before tax (excluding Put Options Expense) Note 1 rose by 11.5% to US$252,763,000
  • Profit attributable to equity holders (excluding Put Options Expense) declined 6.6% to US$200,691,000
  • Profit attributable to equity holders (including Put Options Expense) declined 36.5% to US$136,404,000
  • Earnings per share (excluding Put Options Expense) decreased 7.4% to US9.09 cents
  • Earnings per share (including Put Options Expense) decreased 37.0% to US6.18 cents
  • Declared interim dividend of HK 27.4 cents per share (2005: HK 28.10 cents) and a special dividend of HK 9.1 cents per share (2005: HK 11.3 cents)
  • Dividend payout ratio maintained at 51.7% of the net profit (excluding Put Options Expense) (2005¡G51.7%)
  • Total container terminal throughput rose by 23.5% to 14,974,748 TEUs
  • Total number of berths reached 104 (2005: 81)
  • Container fleet capacity increased 8.1% to 1,111,336 TEUs
  • Overall utilisation rate was 96.0% (2005: 96.4%)
  • The Group further improved its business model and capital structure by the disposal of 600,082 TEUs of containers while maintaining management role for the sold assets

Note 1: "Put Options Expense"

Pursuant to the compensation scheme regarding to the CIMC Share Reform, the Group granted 424,106,507 put options (the "Put Options") to the CIMC Tradable A-Share Shareholders in connection with the conversion of the CIMC non-tradable shares held by the Group into tradable A-Share of CIMC, which are publicly tradable on the Shenzhen Stock Exchange. By adoption of HKAS 39 "Financial Instruments: Recognition and Measurement", the Group has recognised the fair value of the Put Options of US$140,064,000 as derivative financial liabilities, with a corresponding charge to the income statements of the same amount on the first grant date of the Put Options. The fair value of the Put Options was calculated with reference to the closing market price of the Put Options at RMB2.65. As at 30th June 2006, the Put Options market price decreased to RMB1.21 and as a result, the fair value of the financial liabilities decreased accordingly and a fair value gain of US$75,778,000 was recognised. The net effect of the Put Options to the Group's income statement during the period was a net charge of US$64,287,000 (non-cash).

For the first half of 2006, the Group's turnover rose by 5.9% to US$150,286,000 (2005: US$141,898,000). Profit before tax, excluding the Put Options Expense, rose by 11.5% to US252,763,000 while profit attributable to the equity holders was down by 6.6% to US$200,691,000. Earnings per share (before Put Options Expense) decreased 7.4% to US 9.09 cents.

This decline was mainly due to the decrease of profit contribution from the container manufacturing divisions and higher financial cost. Container throughput of COSCO-HIT Terminal dropped by 12.6% due to evacuation of site area and installing new quay cranes. By this upgrading process, the terminal will be capable to accommodate large container vessels of over 9,000 TEUs so as to enhance its efficiency and throughput growth. Antwerp Terminal remained in loss position from commencing its operation since September 2005. Overall performance of terminal division was satisfactory.

After including the Put Options Expense which is a non-cash expense, profit attributable to the equity holders declined 36.5% to US$136,404,000. Earnings per share decreased 37.0% to US6.18 cents.

Terminal and related business

Benefiting from the global and China economic growth, the Group's container terminal division achieved a strong 23.5% throughput growth and handled a total of 14,974,748 TEUs during the period. As at 30th June 2006, total number of berths in operation was 66 berths, including 63 container berths and 3 bulk cargo berths.


Throughput of container terminals

1H 2006
(TEUs)

1H 2005
(TEUs)

y-o-y

Pearl River Delta

4,547,135

4,256,763

+6.8%

COSCO-HIT Terminal

823,493

942,488

-12.6%

Yantian Terminal Phase I, II and III

3,723,642

3,314,275

+12.4%

Yangtze River Delta

3,790,026

3,187,756

+18.9%

Shanghai Terminal

1,941,717

1,700,115

+14.2%

Shanghai Pudong Terminal

1,242,515

1,233,572

+0.7%

Zhangjiagang Win Hanverky Terminal

217,843

180,329

+20.8%

Yangzhou Yuanyang Terminal

107,562

73,740

+45.9%

Nanjing Longtan Terminal

280,389

¡X

N/A

Bohai Rim

6,110,855

4,374,700

+39.7%

Qingdao Qianwan Terminal

3,155,907

2,616,018

+20.6%

Qingdao Cosport Terminal

400,382

265,206

+51.0%

Dalian Port Container Co., Ltd.

1,294,558

1,202,157

+7.7%

Dalian Port Terminal

134,844

2,358

57 times

Yingkou Terminal

387,793

288,961

+34.2%

Tianjin Five Continents International Terminal

737,371

¡X

N/A

Overseas region

526,732

309,821

+70.0%

COSCO-PSA Terminal

284,750

309,821

-8.1%

Antwerp Terminal

241,982

¡X

N/A

Total throughput

14,974,748

12,129,040

+23.5%

Total throughput of terminals in China mainland

13,624,523

10,876,731

+25.3%

 

 

 

 

 

 

 

 

 

 

 

 

Further strengthen our terminal portfolio strategically located in China

As at 30th June 2006, the Group held various interests in 23 joint venture companies of terminal investments, which were strategically located in Pearl River Delta, Yangtze River Delta, Bohai Rim and overseas. Total number of berths was 104, including 99 berths for container terminals, 2 berths for automobile terminal, 3 berths for multipurpose terminal. Including terminals currently in operation and those of newly acquired, total annual handling capacity was increased by 41.3% to 57,100,000 TEUs over the same period last year.

On 26th July 2006, the Group entered into a wholly foreign owned enterprise contract with Tianjin Port Development International Limited and APM Terminals Tianjin Company Limited to establish the Tianjin Port Euroasia International Container Terminal Co., Ltd., which will develop, manage and operate 3 berths of the container terminal located at Tianjin North Port. The Group owns 30% interests in the joint venture company. Equipped with a designed annual handling capacity of 1,800,000 TEUs, this terminal is expected to come into operation in 2008.

On 8th June 2006, the Group entered into a joint venture contract with ¹çªi´ä¶°¥_¨Ú²Ä¤T¶°¸Ë½c¦³­­¤½¥q, OOCL Terminal (Ningbo) Limited and SDIC Communications Co. (°ê§ë¥æ³q¤½¥q) for the establishment of Ningbo Yuan Dong Terminals Limited, of which the Group held 20% interests. The joint venture company will operate and manage berth No. 7 of Ningbo Beilun Container Terminal Phase IV. This container terminal has a designed annual handling capacity of 400,000 TEUs and is expected to become operational in the fourth quarter of 2006.

Equity interests increase in existing terminal

On 19th April 2006, the Group entered into a share transfer contract with S.I. Infrastructure Holdings Limited, pursuant to which S.I. Infrastructure Holdings Limited agreed to transfer its 10% equity interests in Shanghai Pudong Terminal at a share transfer price of RMB465,000,000 (equivalent to approximately US$57,973,000) to the Group. The equity interests held by the Group increased from 20% to 30%.

Commencement of terminal operation

The Group holds 30% equity interests of Dalian Automobile Terminal Co., Ltd., which commenced operation on 6th July 2006. This is the first roll-on, roll-off terminal investment of the Group. The 2 berths of the terminal were equipped with annual handling capacity of 600,000 vehicles.

Container terminal - latest update

On 8th August 2006, the Group entered into a joint venture contract with Quanzhou Port Container Co., Ltd. to establish Quanzhou Pacific Container Terminal Co., Ltd of which the Group owns 71.43% interests. The joint venture company will manage and operate 4 existing berths at Shihu Operating Zone in Quangzhou. It will invest to construct a 100,000-ton container berth and a 50,000-ton multi-purpose berth at Xiutu Operating Zone, both of which are scheduled to commence operations in 2008. The designed annual capacity of these six berths will be expanded to 2,000,000 TEUs.

On 22nd August 2006, the Group entered into an agreement with APM Terminals Invest Company Limited, a subsidiary of A.P. MOller-Maersk, which allowed the latter to subscribe 33.9% interest in COSCO Ports (Nansha) Limited, a subsidiary of the Group holding a 59% interests in Guangzhou South China Oceangate Container Terminal Company Limited. The Group believes that the competitive edge of the terminal will further enhanced by A.P. MOller-Maersk joining as an indirect shareholder.

Container leasing operations

As at 30th June 2006, Florens Container Holdings Limited, a wholly owned subsidiary of the Company, and its subsidiaries ("Florens") owned, operate and managed a container fleet of 1,111,336 TEUs, recording an increase of 8.1% from a year ago. Florens ranked as the world¡¦s third largest container leasing company (2005: ranked at fourth position) with approximately 10.7% share of the global market. Average age of the Group's container fleet was 4.38 years.

As at 30th June 2006, the Group leased a total of 416,270 TEUs (2005 : 362,635 TEUs) to COSCON, which represented 37.5% (2005: 35.3%) of the entire container fleet. Containers available to International Customers totalled 695,066 TEUs, representing 62.5% of the total containers fleet, of which 634,656 TEUs were managed containers.

While containers dedicated to COSCON remained 100% utilised during the period, the overall average utilisation rate of the Group was 96.0% (2005: 96.4%), well above the industry average of approximately 91.8% (2005: approximately 92.0%).

Disposal of Containers

In June 2006, the Group announced it had entered into a sale agreement and various administrative services agreements with "AD ACTA" 634. VermOgensverwaltungsgesellschaft MBH. Pursuant to the sale agreement, Florens and its direct wholly-owned subsidiaries disposed of 600,082 TEUs. In addition, Florens will provide administrative services to the sold assets pursuant to the administrative services agreements. The total proceeds received by the Group amounted to US$869,203,000, representing sale proceeds of the sold assets of US$846,524,000, a Finder Fee of US$15,240,000 and an upfront administrative service fee of US$7,439,000.

The disposal will not affect the container leasing business of the Group, as the Group will purchase new containers and continue to lease them to customers. The Company considers that the disposal will help the Group to improve the business model and capital structure of its container leasing business, to increase its sources of income and to lower the operational risks. At the same time, it will enable the Group to increase its market shares in the container leasing business while maintaining a relatively light balance sheet size. Taking into account the Finder Fee of approximately US$15,240,000, the Group generated profit after taxation of approximately US$65,436,000 from the disposal.

Logistics operations

During the first half of 2006, COSCO Logistics geared up its marketing efforts to gain further inroads in logistics project development and to expand its market share in the home appliances, automobiles, electricity and petrochemical sectors.

The shipping agency business handled 64,562 vessels during the period, including 22,596 vessels handled by wholly-owned subsidiaries. The freight forwarding division handled 64,330,800 tonnes of cargoes during the period, achieving a 25.4% increase from last year. The sea-freight forwarding agency business grew 17.2% with 905,101 TEUs handled. Net profit contribution from the Group's logistics business amounted to US$9,321,000, an increase of 22.2% over the same period last year.

Container manufacturing

At the beginning of this year, sales volume and container price continuously remained at low level because of unfavourable market condition by the end of 2005. As a result, net profit contribution from CIMC during the period declined 33.3% to US$26,843,000.

In addition, Shanghai CIMC Reefer Container Co., Ltd. and Tianjin CIMC North Ocean Container Co., Ltd. contributed a total of US$4,399,000 (2005: US$6,722,000) for the period.

Other investments

Liu Chong Hing Bank, in which the Group held a 20% interest, made a net profit contribution of US$6,327,000, up 29.3% from last year.

Investor Relations

The Group continued to dedicate its efforts to enhance investor relations by providing sufficient channels to communicate with stakeholders about the company's management philosophy, business operation, future investment and corporate development strategy. We aim to enhance our shareholders value by increasing transparency and maintaining good practices in corporate governance standards.

In April 2006, COSCO Pacific was again named among Forbes' Top 2000 Enterprises for 2006 in The Forbes Global 2000.

Prospects

The global economy will continue to be robust in 2006 with an estimated growth of 3.9% while China is expected to achieve a 10.7% growth. The world trade is expected to grow by 8.6%. The Group will continue to improve its investment strategy by further strengthening our diversified terminal portfolio in the regions of the Pearl River Delta, Yangtze River Delta and Bohai Rim. Meanwhile, we will further elaborate the terminal investment opportunities in the overseas market.

Container management has become a new source of revenue for our container leasing division. The Group intends to further expand its container leasing fleet capacity while maintaining high utilisation rate so as to strengthen its leading position in the industry. In terms of fleet expansion, we will work closely with COSCON to cater to its future new shipbuilding expansion plans and continue to expand our customer base by providing container leasing and management services to other international customers.

As such, the Group is confident in its future business prospects.

Details of the interim results announcement will be available in our website (http://www.coscopac.com.hk), It will also be published in The Standard and Hong Kong Economic Times on 8th September 2006.