Cosco profit narrows 13.3% to $27.6 million

Gross profit is up for the engineering firm but was eaten up by plummeting other income and almost tripling finance costs.

Gross profit increased 56.2% from $75.1 million in Q2 2011 to $117.4 million in Q2 2012 mainly due to higher profit contributions from ship repair & conversion and marine engineering projects, according to Cosco's 2Q12 financial results.

Other income declined to $34 million from $61.4 million while finance expenses ballooned to $26 million from $9 million. Distribution costs also rose by 44.9% to $19.0 million mainly due to additional marketing and promotional activities.

Overall, net profit attributable to equity holders of the Company decreased 13.3% from $31.9 million in Q2 2011 to $27.6 million in Q2 2012 mainly due to lower profit contributions from dry bulk shipping operations. Compared to 1H 2011, net profit attributable to equity holders of the Company decreased 19.6% from $68.9 million to $55.4 million in 1H 2012.

Group turnover fell 2.1% to $975.3 million in Q2 2012 from $996.0 million in Q2 2011 due to a decline in shipyard revenue. Turnover from shipyard operations decreased marginally by 2.2% to $960.8 million in Q2 2012 mainly due to lower revenue contribution from ship building segment which more than offset the growth in revenue from ship repair and marine engineering segments. The Group successfully delivered 8 dry bulk carriers in the quarter. Turnover from dry bulk shipping and other businesses increased marginally by 2.8% to $14.6 million in Q2 2012 due to contribution from other businesses which more than offset the decline in dry bulk shipping revenue affected by lower charter rates.