Cosco Shipping Ports Limited have announced the results of the Company and its subsidiaries (the “Group”) for the three months and the nine months ended 30 September 2020.
2020 Third Quarter Results Highlight
- Revenue was US$270.0 million, +6.0% yoy
- Gross profit was US$ 70.5 million, +5.9% yoy
- Share of profits from JV and associates was US$ 80.1 million, +12.3%yoy
- Profit attributable to equity holders of the Company was US$ 85.9 million, +19.7% yoy
- Earnings per share was US 2.66 cents, +16.7%yoy
2020 Nine Months Results Highlight
- Revenue was US$722.7 million, -6.5% yoy
- Gross profit was US$ 169.6 million, -22.9% yoy
- Share of profits from JV and associates was US$ 208.8 million, -3.3%yoy
- Profit attributable to equity holders of the Company was US$ 249.3 million, +13.5% yoyNote
- Earnings per share was US 7.83 cents, +11.4%yoy
For the three months ended 30 September 2020, the throughput of the Greater China region increased by 3.4% to 26,069,126 TEU (3Q2019: 25,208,454 TEU), accounting for 77.9% of the Group’s total throughput. For the nine months ended 30 September 2020, throughput of the Greater China region decreased by 1.6% to 70,106,667 TEU (3Q2019: 71,223,785 TEU), and accounted for 77.0% of the Group’s total throughput.
During the period, throughput of the Bohai Rim region increased by 5.3% to 11,198,475 TEU (3Q2019: 10,634,378 TEU), accounting for 33.5% of the Group’s total throughput. Throughput of QPI increased by 6.0% to 5,714,000 TEU (3Q2019: 5,390,000 TEU).
Yangtze River Delta
Throughput of the Yangtze River Delta region decreased by 26.1% to 3,906,628 TEU (3Q2019: 5,287,580 TEU), accounting for 11.7% of the Group’s total throughput. The drop in throughput was mainly due to completion of the disposal of Nanjing Longtan Terminal, Yangzhou Yuanyang Terminal and Zhangjiagang Terminal by the Group and throughput for the three month period mentioned above excluded the throughput of these three terminals. As Nantong Tonghai Terminal enhanced marketing activities to increase shipping lines, the throughput increased by 8.2% YoY to 373,763 TEU (3Q2019: 345,462 TEU). Benefitting from new shipping lines, throughput of Ningbo Yuan Dong Terminal increased by 8.3% to 851,829 TEU (3Q2019: 786,564 TEU).
Although countries around the world are still facing challenges brought by COVID-19 epidemic, uncertainties lie ahead in global economy and trade activities, COSCO SHIPPING Ports has made improvement in both throughput and earnings in the third quarter. This year, the Group continues to actively implement “Lean Operations” strategy and adopt a series of measures, such as control cost and improve efficiency. In terms of cost control, domestic terminals have shown preliminary achievements. As the utilization rate of overseas newly-developed terminals continues to increase and the epidemic gradually starts to be under control, overseas terminals are expected to achieve improvement in reducing cost per TEU.
As at the end of September, the Group has cash and bank deposits of approximately US$1.22 billion. It is expected that there will be sufficient cash to support the dividend policy of the Company in the year 2020. The Group is considering the declaration and payment of second interim dividend in lieu of final dividend in order for shareholders to receive the dividend earlier.
The Group is actively accelerating informatization and digitization, unifying terminal operating system and continuing to implement Navis N4 system in its subsidiaries. In addition, COSCO SHIPPING Ports continues to actively control cost and introduce “cost per TEU” in the operations and management of terminals, in order to set up operational cost control target for terminals in which the Group has controlling stakes. The Group continues to fine-tune cost analysis model, analyze the composition and percentage of terminal costs, set up operational cost control target and set up cost control plan; cultivate the mindset of cost-oriented in marketing and daily operation, formulate feasible, scientific and effective measures with clear target; find out cost-optimising parts and procedures to enhance competitive advantage in cost reduction.
The Group endeavors to innovate sales and marketing strategies and enhance the overall sales and marketing, build customer value analysis model to mainly analyze the profit contribution from each type of container of each shipping company, in order to develop more effective marketing and negotiation strategies based on each terminal’s situation, as well as further tap customer value and improve terminals’ throughput and revenue.
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