COSCO issues profit warning, scraps loss-making Octobuoy project

It will be charged $90m for the discontinued unit.

COSCO Corporation’s shareholders shouldn’t expect positive results as earnings season rolls in. The firm has issued a profit guidance for its upcoming FY14 results, stating that it is expecting significantly lower earnings as compared to FY13.

COSCO blamed the decline on the fall in crude oil prices, as well as a $90m one-off charge that it will take in respect of the Octabuoy hull and topside module project.

The firm stated that it is discontinuing the Octabuoy project because it has been unable to find a new buyer for the customised unit.

“The steep fall in crude oil prices over recent months has had an adverse impact on the global offshore marine industry. This has made it even more difficult to secure a buyer for the Octabuoy as industry players have cut back even further on new orders. This difficulty is compounded by the specialised design of the Octabuoy and the substantive investment in the customised equipment that is required to continue the project,” stated COSCO.