Struggling Cosco braces for hefty losses in FY15

Its shipyards struggled with deferments and cancellations.

Cosco is bracing for significant loss, according to an announcement by the company.

“The Board is of the view that the 4Q2015 Results and its FY2015 Results will show a significant net loss as compared to earnings recorded in the corresponding period of the previous financial year,” said the company.

It cited several reasons for the downturn in profit. Firstly, the sustained depressed state of crude oil prices reportedly hurt the global offshore industry. Secondly, the slump in the shipbuilding market dragged down Cosco shipyards, and lastly, the languid dry bulk shipping market put considerable pressure on the company’s dry bulk fleet operations.

Due to the challenging market conditions, in Q4 ending 31 December, Cosco’s shipyards suffered through writedowns of certain inventory and provisions for impairment of trade receivables for certain contracts, which are deferred or potentially cancelled.