COSCO’s net profit sank 32% to $20.9m in FY14

It was hit with a $13.2m loss in Q4.

COSCO Corp reported that its net profit sank 32% to $20.9m in FY14, citing difficult business conditions in the slowing offshore market.

COSCO also saw a net loss of $13.2m in the fourth quarter, compared to a net profit of $4.6m in the same quarter last year.

For FY14, turnover from shipyard operations increased 21.9% to $4.2b on the back of higher revenue contribution from marine engineering and ship building segments. However, turnover from dry bulk shipping and other businesses fell 5.6% to $52.5m on lower charter rates.

“Our Group maintains a cautious outlook for 2015. The global offshore market has slowed down significantly. Many oil majors have started to cut expenditure leading to fewer orders for deep water rigs. In addition, a number of offshore rigs and supply vessels delivered in past months have not secured contracts for lease yet. Under such challenging circumstances, new orders have declined. All these developments have taken place against the background of weak global economic conditions which, in the latter half of 2014, were accompanied by steep falls in crude oil prices,” said Captain Wu Zi Heng, Vice Chairman and President of the Company.

COSCO expects operating margins on new shipbuilding projects that were secured in recent years at low contract values to continue to be under great pressure in 2015.