Persistent Slump Widens COSCO Corp’s Loss
- Business & Finance
As the marine and shipping industry slump shows no signs of relenting, COSCO Corporation (Singapore) Limited has seen its net loss widen in the third quarter of 2016 to SGD 102.3 million (USD 72.6 million) from SGD 82.1 million (USD 58.2 million) reported a year earlier.
The company’s turnover for the period dropped by 30 percent to SGD 662.3 million from SGD 949.5 million recorded in the corresponding quarter of 2015, on continued weaknesses in the shipyard and shipping sectors.
Turnover from shipyard operations plunged by 30 percent to SGD 654.7 million on lower revenue contributions from ship repair, ship building and marine engineering, while turnover from dry bulk shipping and other businesses declined by 21 percent to SGD 7.7 million due to lower charter rates.
“It has been another difficult quarter for our industry. Persistent weakness in crude oil prices has taken its toll on the offshore marine industry and is showing no sign of letting up. Shipbuilding order books and contract prices are suffering under the heavy weight of the industry over-capacity amidst a weak global economy which has also depressed shipping rates,” Gu Jing Song, Vice Chairman and President of the Company, said.
“Given the continuing weaknesses in the macro-economic environment, we do not see any sign that the bearish industry outlook will turn around anytime soon. As such external headwinds are beyond our Group’s control, we are working hard to keep a tight lid on our internal costs and to increase efficiencies and productivity,” he added.
As at September 30, 2016, the company’s gross order book stood at USD 6.8 billion with progressive deliveries up to 2019.
However, the order book continues to be subject to revision from any new, cancellation, variation or scheduling of orders that may arise.
New orders received in the first nine months of 2016 include one trailing suction hopper dredger, one self-elevating workover unit, two crude oil tankers and seven container vessels.
COSCO Corporation (Singapore) said that it expects possible decline in new orders and more project delivery delays or request for deferments from some customers.