EQS-News / 31/03/2020 / 10:32 UTC+8
Press Release
(For immediate release)
Operating Performance Improved Significantly with Clear and Firm Development
Strategy
COSCO SHIPPING Holdings Announces 2019 Annual Results
(30 March 2020, Shanghai) - The leading integrated container shipping
service provider, COSCO SHIPPING Holdings Co., Ltd. ("COSCO SHIPPING
Holdings" or "the Company") (SSE: 601919; HKEx: 1919) today announced its
annual results for the twelve months ended 31 December 2019 (the "Period").
In 2019, global economic and trade situation faced severe challenges.
Economic growth had hit a new low since the financial crisis of 2008, and
the demand growth in container shipping had slowed year-on-year.
However, in the face of challenges, COSCO SHIPPING Holdings adhered to the
guiding principle, deeply facilitating various work including globalization,
quality improvement, digitalization and end-to-end business development. The
Company continued to improve quality and efficiency and realized synergies
in various aspects, which significantly improved the Company's operating
performance compared with the same period of the previous year.
During the Period, according to Hong Kong Accounting Conventions, the
revenue of the Company reached RMB150.54 billion, up by 25.1% year-on-year.
Operating profit amounted to RMB7.22 billion, up by 44.5%. The net profit
attributable to equity holders of the Company amounted to RMB6.69 billion,
representing a year-on-year increase of RMB5.46 billion or 443.9%, and the
basic earnings per share amounted to RMB0.55 per share.
The revenue of the Company's container shipping business amounted to
RMB14.48 billion, up by 26.1%. The Company's container shipping business
completed 25.74 million TEUs of bills of lading, representing an increase of
18.1% year-on-year, if on comparable basis, up by 2.7%. The container
shipping business of the Company recorded revenue of RMB7.22 billion, up by
8.8%. COSCO SHIPPING Ports achieved a total throughput of 124 million TEUs
in terminal business, representing a year-on-year increase of 5.5%. During
the Period, Orient Overseas (International) Limited (OOIL), a subsidiary of
the Company, completed the sale of LBCT LLC, which generated a one-time net
income and achieved good shareholder returns.
During the Period, the Company's cash flow from operating activities had a
solid performance, with a net cash inflow of RMB 21.2 billion. Net cash
inflow from investing activities amounted to RMB4.03 billion, and net cash
outflow from financing activities amounted to RMB9.54 billion. As at 31
December 2019, cash and cash equivalents amounted to RMB49.76 billion,
representing an increase of RMB16.56 billion or 49.9% as compared to the
beginning of the Period.
Benefited from the significantly improved operating results and the
approximately RMB7.7 billion raising through the A-share non-public offering
in January 2019, the Company's financial foundation has been further
consolidated. As at 31 December 2019, total assets of the Company amounted
to RMB262.22 billion, and total liabilities amounted to RMB193.1 billion.
Total equity attributable to equity holders of the Company amounted to
RMB35.36 billion, representing an increase of 12.47 billion year-on-year.
The net debt to equity ratio was 101.54%, representing a significant
decrease of 83.7 percent point as compared to the end of last year.
As at 31 December 2019, the Company's container fleet had 507 vessels, with
the total shipping capacity reached 2.97 million TEUs, representing a growth
of 7.6% as compared to the end of 2018. The capacity scale continued to rank
the third in the world. COSCO SHIPPING Ports, a subsidiary of the Company,
operated 197 container berths in 36 ports worldwide with an annual designed
handling capacity of 113 million TEUs.
On 10 March 2019, OOIL, a subsidiary of the Company, announced that ordered
5 vessels with 23,000 TEUs are estimated to be delivered in 2023 as planned.
The move will fill the shipping capacity gap caused by the gradual
withdrawal of unsuitable vessels in the future. After the delivery, OOCL
will be able to independently form a complete loop in the Asia-Europe trade
and provide more stable and highly efficient services for customers.
Release development potential after the restructuring, and deepen reform and
innovation to improve market competitiveness
COSCO SHIPPING Holdings has completed the restructuring of major
transactions since March 2016, divesting its dry bulk business and container
leasing business. The Company's strategy has transformed from "comprehensive
shipping services" to "focusing on the development of container shipping
service supply chain". The main business development path became clearer.
Benefited from the effective development strategy and efficient execution,
the Company can quickly adapt to the changing macro environment, and
properly respond to external challenges, presenting a sound development
trend. In the four fiscal years (2016-2019) after the restructuring, the
annual average level of China Container Freight Index (CCFI) trended flat,
but the Company's operating performance improved steadily, showing strong
profitability and development potential.
2016 2017 2018 2019
CCFI 711 820 818 824
Net profit attributable to equity holders of -7.1 1 0.2 1.6
the Company after deduction of non-recurring
(billion)*
Operating cash flow (billion) 1.5 7.1 8.1 21.2
Equity attributable to equity holders of the 18.3 20.7 22.9 35.4
Company (billion)
*According to China Mainland Accounting Standards, net profit data excluded
non-recurring profit and loss
The Company completed the initial grant of Share Option Incentive Scheme in
July 2019. The measure was important to the Company's continuous deepening
reform and innovation, which further improved the Company's med to long term
incentive plan, promoted the unification of operating management activities
with shareholders' interests, and played an important role in promoting the
enhancement of corporate value and sustainable development.
Adhering to the globalization strategy, promoting the risk resistance
capability
In 2019, based on maintaining the service advantages of the major east-west
services, COSCO SHIPPING Holdings adhered to the globalization strategy and
continued to increase its shipping capacity in emerging markets, non-China
markets and regional markets, which was in line with the changes in the
global economic and trade pattern. The cargo volume of the Company in
emerging markets and non-China markets increased by 7.0% and 7.9%
year-on-year respectively, much higher than the overall volume growth rate
on the comparable basis(2.7%). The ratio of the Company's non-China cargo
volume to the total foreign trade volume (i.e. volume excluding China
domestic routes) increased from 35.5% in 2018 to 37.0%. The Company further
consolidated its foundation for global development and enhanced its ability
to resist regional and periodic risks.
In respect of the terminal business, as the world's leading ports operator,
COSCO SHIPPING Ports, a subsidiary of the Company, actively optimized the
global terminal network and improved the operation quality and service level
of terminal companies in which it has controlling stakes. COSCO SHIPPING
Ports Abu Dhabi Terminal successfully entered formal commercial operations
and aims to become a major container gateway port and important hub in the
Middle East. During the Period, COSCO SHIPPING Ports successfully acquired
60% equity interest in Chancay Terminal in Peru, which is the first terminal
project in South America controlled by the company.
Promoting the digitalized development with conforming to the trend of
information era
In July 2019, CargoSmart, the subsidiaries of COSCO SHIPPING Holdings
announced the execution of Global Shipping Business Network (GSBN) services
agreements with other maritime industry operators. Under these agreements,
each signatory commits to establish the GSBN, a non-profit joint venture to
accelerate the digital transformation of the shipping industry. In early
2020, the GSBN Shareholder Agreements were signed, GSBN will be formally
established and put into operation after completing all the regulatory
approval procedures. CargoSmart will provide technical solutions and
platform operation services for GSBN.
COSCO SHIPPING Lines, a wholly-owned subsidiary, actively built its
self-operated e-commerce platform. In 2019, at the domestic e-commerce
platform, the cargo volume increased by 14% year-on-year, and the
transaction volume exceeded RMB1.3 billion. The company's foreign trade
e-commerce business continued to expand and covered all foreign trade
routes, with the total cargo volume year-on-year increase of 150%.
In the long term, the Company's unremitting efforts in the digitalized field
based on its core business will be conducive to improving the efficiency of
internal management and customer service experience, so as to drive customer
retention and loyalty.
Actively fulfilling social responsibilities and driving the sustainable
development of the industry
In 2019, the Company continued to promote and use various advanced
the new regulation.
During the Period, the brand image and market recognition of the Company
have been further enhanced. In July 2019, the Company was included in
FORTUNE China 500, ranking the 75th in the list. In September 2019, the
shares of the Company were selected as a constituent stock of the Hang Seng
Corporate Sustainability Index Series for the second successive year. In
January 2020, the Company won "Best Infrastructure and Public Utilities
Stock Company Award" and the "Best Listed Company with Social
Responsibility" for the second successive year in the Golden Hong Kong Stock
Award, fully reflecting the Company's benchmarking position and outstanding
influence in the industry.
Since the beginning of 2020, facing the sudden outbreak of COVID-19, COSCO
SHIPPING Holdings has actively fulfilled its social responsibilities and
made every effort in the epidemic prevention and control. While effectively
protecting the life, health and safety of its on-shore and off-shore
employees and ensuring the smooth and orderly business operation, the
Company coped with the difficult situation to give priority to ensure the
transportation of supplies for epidemic prevention and the living in the
epidemic areas by providing "Green Channel", making outstanding
contributions to the battle against the epidemic.
At the time when domestic confirmed cases reached a peak, many domestic and
overseas partners and suppliers of COSCO SHIPPING Group offered support and
assistance for epidemic prevention and control in China. Today, COSCO
SHIPPING Group will also do its utmost to help other countries overcome
difficulties and join hands to combat the epidemic.
On 16 March, a flight carrying anti-epidemic supplies, including 50,000
surgical masks and 200 protective suits, donated by COSCO SHIPPING Group set
off from Shanghai Pudong International Airport to Liguria, Italy, with
sincere wishes "Attraverso le Asperità Alle Stelle".
On 19 March, COSCO SHIPPING Group donated a batch of medical supplies
including 10,000 pairs of latex gloves, 500 sets of protective suits and 500
pairs of protective goggles to Greek Shipping and Island Policy Ministry in
a bid to assist the daily patrol and emergency response of the Greek Coast
Guard.
On 26 March, 20,000 surgical masks donated by COSCO SHIPPING Group to Port
of Antwerp successfully arrived in Belgium. The Antwerp Port Authority
expressed gratitude to COSCO SHIPPING Group on the official website with an
ancient Chinese saying "a drop of water in need, shall be thanked with a
fountain of deed", meaning that Belgium and China are closely connected by
shipping despite the thousands of miles in between.
On 25 March, COSCO SHIPPING (North America) Co., Ltd. donated cash and
medical supplies to Secaucus city government and Hackensack University
Medical Center in New Jersey to support the local fight against the
epidemic. The donation, including a total of USD35,000 in cash and 2,000 N95
masks, was delivered to Hackensack University Medical Center in a
contactless way throughout the whole process to protect the front-line
medical workers so that they can continue to save lives of the local people
on the premise of ensuring their own safety.
Looking forward to 2020, the Company will pay close attention to challenges
brought by COVID-19 to the global economy and shipping market. While
boosting confidence, the Company will continue to focus on high-quality
development, innovative development and coordinated development, and keenly
grasp opportunities in the industry to continuously optimize the Company's
international development path in the fast-changing environment. In
addition, the Company will initiatively integrate internal and external
resources to enhance the core competitiveness of high-quality development
and improve the ability to continuously serve customers worldwide.
In terms of high-quality development, the Company will firmly advance the
global route network layout and the construction of the global terminal
network in order to continuously improve service quality and customer
experience. Meanwhile, the Company will continue to consolidate the
advantages of low-cost development and strengthen cost control in key areas.
In terms of innovative development, the Company will comprehensively deepen
enterprise reform and innovation, release development vitality, actively
promote the construction of digital network and strengthen the capability of
service integration to constantly improve management efficiency and customer
experience.
In terms of coordinated development, the Company will deepen the mechanism
of collaboration and integration and stick to the dual-brand operating mode.
The Company will continue to promote industrial chain collaboration,
especially the synergy between ports and shipping businesses.
In the future, COSCO SHIPPING Holdings will continuously endeavor to build
the Company as a top-tier integrated container shipping service provider, to
create value and returns for customers and shareholders, and achieve win-win
and common development with all parties.
About COSCO SHIPPING Holdings Co., Ltd.
COSCO SHIPPING Holdings Co., Ltd. ("COSCO SHIPPING Holdings", Stock Code:
1919.HK; 601919.SS) is the listed company controlled by China COSCO SHIPPING
Corporation Limited. The Company was listed on the Hong Kong Stock Exchange
in June 2005 and the Shanghai Stock Exchange in June 2007.
The Company focuses on container shipping and terminal operations. As of 31
December 2019, through its wholly-owned subsidiary, COSCO SHIPPING Lines and
its holding subsidiary Oriental Overseas International, the Company operates
a total fleet capacity of 507 ships and 2.97 million TEUs, ranking as the
world's third largest container shipping company. COSCO SHIPPING Ports,
another controlled subsidiary of the Company, operates a total of 197
container berths in 36 ports around the world, with an annual design
processing capacity of 113 million TEU. COSCO SHIPPING Holdings is committed
to become a top-tier integrated container shipping service provider with its
continuing efforts to build up a global network, improve operational
quality, provide customers with services and create value for shareholders.
Media Enquiries
COSCO SHIPPING Holdings Company Limited
Xu Junjie / Dong Dai
Tel: (86) 021-6029 8620/ (86) 185 1617 9776
Email: investor@coscoshipping.com
PRChina Limited
Ray Sun / Jack Liu
Tel: (852) 2522 1838/ (852) 2522 1368
Email: rsun@prchina.com.hk [1]/ zyliu@prchina.com.hk [2]
Document: https://eqs-cockpit.com/c/fncls.ssp?u=XICFETYEEB [3]
Document title: Operating Performance Improved Significantly with Clear and
Firm Development Strategy COSCO SHIPPING Holdings Announces 2019 Annual
Results
31/03/2020 Dissemination of a Marketing Press Release, transmitted by EQS
Group.
The issuer is solely responsible for the content of this announcement.
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1: mailto:rkwok@prchina.com.hk/
2: mailto:dauyeung@prchina.com.hk
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(END) Dow Jones Newswires
March 30, 2020 22:32 ET (02:32 GMT)
