2019 interim results presentation eng...
TRANSCRIPT
Aug 2019
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5
712.01
9.79
EPS DPS
HK cents
3
1H18 1H19
-18%
1H18 1H19
+40%
HK cents
(HK$’ m) 1H2018 1H2019 YoY
Revenue 4,787.6 1,626.0 -66%
Gross profit 305.6 274.2 -10%
Other income and gains/(losses) – net 75.2 (8.5) Turnaround loss
Selling & Admin expenses (256.8) (241.1) -6%
Operating profit 144.9 59.9 -59%
Finance income – net 74.9 105.8 +41%
Share of profit/(losses) from JVs &Associates (2.4) 16.8 Turnaround profit
Profit attributable to Shareholders 184.0 150.0 -18%
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Adjusted Net Profit* (HK$’ m) 1H2018 1H2019 YoY
Excl. non-recurring income/gains in 1H18 ($17.8m reversal of provision, $12.2m government subsidy for factory relocation)
158.1 150.0 -5.1%
Further exclusion of FX gains of $39.7m in 1H18 and FX losses of $14.1m in 1H19 123.8 162.2 +31.0%
*Adjusted net profit is calculated by after tax effect with a tax rate of 16.5%
(HK$’ m) As of 31 Dec 2018 As of 30 Jun 2019
Total Assets 9,256.7 9,284.1
Total Liabilities 1,102.0 1,119.3
Shareholders’ equity 7,853.9 7,869.7
Cash on Hand 6,375.7 6,166.4
Debt to Equity 0.5% 0.7%
Current Ratio 7.8x 7.7x
Quick Ratio 7.5x 7.4x
Interest Coverage 176.7x 115.1x
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Per Share As of 31 Dec 2018 As of 30 Jun 2019
Issued Shares 1,532,955,429 1,532,955,429
Net Assets (HK$) 5.12 5.13
Net Cash (HK$)(Cash on Hand minus Total Liabilities) 3.44 3.29
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(HK$’ m) 1H2018 1H2019 YoY
Shipping Services 128.0 108.2 -15%
- Ship Trading Agency 58.0 32.2 -45%
- Insurance Brokerage 24.0 23.2 -3%
- Marine Equipment 37.6 36.1 -4%
- Coatings 0.8 25.8 +3005%
- Marine Fuel Trading 7.6 (9.0) Turnaround loss
(HK$’ m) 1H2018 1H2019 YoY
General Trading 19.3 6.9 -64%
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58.0
32.2
PBT
1H18 1H19
-45%
HK$ m
43.4
31.9
Adjusted PBT (taking out FX factor)
1H18 1H19
-26%
HK$ m1. FX gains of $0.16m in 1H19 vs $14.6m in 1H18
2. Adjusted PBT margin 64.5% in 1H19 vs 70.2% in 1H18
Orders through COSCO SHIPPING Ship Trading
1H18 1H19
No. of vessel
mnDWT
No. of vessel
mnDWT
Newbuild delivery 18 3.1 8 1.3
Newbuild contracts 8 1.9 11 1.6
Secondhand vessels 14 0.56 11 0.2
Orderbook on hand* 53 9.85 84 10.09
*as at the end of Jun
24.0 23.2
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PBT
1H18 1H19
-3%
HK$ m
1. Revenue declined by 2% to $35.6m in 1H19 vs $36.2m in 1H18
2. Lower ship prices drove premium down
3. Increase in war insurance counterweigh some downside pressure
33.0 36.8
37.6 36.1
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PBT
1H18 1H19
-4%
HK$ m
Adjusted PBT (taking out FX factor)
1H18 1H19
+11.5%
HK$ m1. FX losses of $0.7m in 1H19 vs gains of $4.6m in
1H18
2. Adjusted PBT margin 5.8% in 1H19 vs 5.9% in 1H18
1. Revenue increased by 15% to $640.1m in 1H19 vs $555.9m in 1H18
2. Increased number of external customers
9.3
3.9
0
2.7
-8.5
19.2
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PBT of COSCO Kansai
1H18 1H19
-58%
HK$ m
1H18 1H19
Turnaroundprofit
HK$ m
1H18 1H19
HK$ m
Profit of COSCO Juton Profit of Nasurfar
1. Nasurfar was acquired in Aug-2018
2. Avg monthly profit in 1H19 was $0.46m, vs $0.40m in FY18
3. Earnings growth on track with effective governance and cost control
1. Enhanced pricing strategy to reflect material costs instantly
2. Higher GPM with lower costs
1. All sales volume +10.5% YoY2. Margin squeezed as container
coatings ASP -19% YoY3. Absence of $12.2m government
subsidy recorded in 1H18
(million litres) 1H18 1H19 YoY
Newbuild 22.7 22.1 -3%
Maintenance 10.5 11.6 +11%
(tonnes) 1H18 1H19 YoY
Container 9,983 11,684 +17%
Heavy-dutyanti corrosion 9,117 9,426 +3%
7.6
-9.0
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PBT
1H18 1H19
HK$ m
1. Sinfeng’s business was purposely trimmed down for risk control
Turnaroundloss
HK$ million 1H18 1H19
Operating profit of Sinfeng 3.5 (1.6)
Share of profit from Double Rich 5.1 (6.9)
19.3
6.9
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PBT
1H18 1H19
HK$ m
1. ASP +33% YoY
2. Absence of $17.8m reversal of provision recorded in 1H18
(tonnes) 1H18 1H19 YoY
Asphalt sale volume 77,197 69,690 -9.7%
-64%
1.5
6.9
Adjusted PBT (taking out non-recurring factor)
1H18 1H19
+360%
HK$ m
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Global Order Book‘m DWT
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Source: Clarksons
234.4222 227.6
198
100.999.8 95.3 88.4
2016 2017 2018 Jun-19
Global China
100.6 9880.6
50.9
83.7 83.8
36.1 38.7 35.218.6
30.4 33.2
2016 2017 2018 Jun-19 E2019 E2020
Global China
Clarksons Newbuilding Price Index
Newbuilding Delivery Newbuilding Contracting
m DWT m DWT
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Source: Clarksons
126
133138
131
123125
130 131
2012 2013 2014 2015 2016 2017 2018 1H19
118.3
30.2
91 93.1
24.937.9
13.7
41.4 33.5
13.7
2015 2016 2017 2018 1H19
Global China
3,152
3,786
2,027
1,419
2,238 2,086 2,202
1,785
Total Output ASP
Output and Average Selling Price of Newbuild Containers in China
Source: Company Statistical Data
‘000 TEU
17
1H18 1H19FY2017 FY2018
-30%
-18.9%
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Shipping services unified
operation platform
Non-financial business
investment platform
LeadingInternational
Shipping Service
Company
Strong supportfrom COSCOSHIPPING
Group
Clear vision
Ample internal
resources
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China COSCO Shipping Corporation Limited, a merger of COSCO Group and China Shipping Group, was established on 5 Feb 2016 in Shanghai. It comprises 1,114 vessels with a capacity of 85.32mn DWT, ranking No.1 in the world. The vision of China COSCO Shipping is to build a world-leading business entity that provides integrated logistics and supply chain services.
*
China COSCO SHIPPING Corp.*
Specialised and General Cargo Transportation
COSCO SHIPPING 600428.SH
50.94%
COSCO SHIPPING Development
2866.HK / 601866.SH
Container Leasing and Ship Chartering
39.02%China Shipping
Network Technology 2401.SZ
Intelligent Transportation
System
50.01%
Shipping Services
COSCO SHIPPINGInternational
517.HK
66.12%45.47%
46.72%
Port Operation
COSCO SHIPPING Holdings
1919.HK / 601919.SH
Container Shipping
Oil & Gas Shipping
COSCO SHIPPING Energy
1138.HK / 600026.SH
COSCOSHIPPING
Ports 1199.HK
38.56%
Shipping Logistics Shipping Finance
Equipment Manufacturing
ShippingServices
Social Services Internet+
Orient Overseas (International)
0316.HK^
Container Shipping
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• As at the end of Dec 2018, the total number of issued shares was 1,532,955,429.
COSCO SHIPPING International (Hong Kong) is a HK-based shipping services provider, offering diversified and specialized shipping related services or products to customers such as shipping companies, ship yards, container manufacturers, etc.
COSCO SHIPPING
(Hong Kong) Ship Trading
Public shareholders
COSCO SHIPPING International Trading
COSCO Kansai [Container Coatings]
COSCO SHIPPING(HK) Insurance
Brokers
Yuantong Marine Service (HK)
100%
33.88%
64%
50%
100%
18%
66.12%
Ship Trading Agency
Marine Insurance Brokerage
Marine Equipment & spare parts supply
Production & Sale of Coatings
General Trading
Shenzhen COSCO Insurance Brokers
100%
55%
Jotun COSCO [Marine Coatings]
Marine Bunker Supply
Sinfeng Marine Services(Singapore)
Double Rich (HK)
100%100%
COSCO SHIPPING
100%
Shin Chung Lin (Japan)
Xing Yuan (Singapore)
100%
100%
Yuantong Marine Trade (Shanghai)
100%
Centralised Procurement Platform for COSCO SHIPPING’s Fleet
Hanyuan Technical Service (Germany)
100%
COSCO (Beijing) Marine Electronic Equipment Limited
100%
COSCO SHIPPING (HK)
COSCO SHIPPING International (00517.HK)*
COSCO SHIPPING International (00517.HK)*
CSHT Marine Machinery Suppliers Limited
51%Yuan Hua Technical &
Supply (USA)100%
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Nasurfar Biomaterial Technology
33%
1997 2002 2003 2004 2005 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018
COSCO HK Group acquired a HK-listed Shun ShingConstruction &Engineering Company Limited and renamed it as “COSCO International Holdings Limited ”
Acquired COSCO Ship Trading from COSCO Group, and began to develop shipping services
Acquired equity interests in COSCO Kansai to develop container coatings
Acquired COSCO HK Insurance Brokers and Yuantong from COSCO Group for marine insurance brokerage and equipment supply
Established thejoint venture Jotun COSCO to develop marine coatings
Disposed of propertyinvestments in HK
Divested the building construction business& a property investment in Shenyang, China
Acquired 18% equity interest in Double Rich in HK and established Sinfengin Singapore, first into marine bunker supply business
Acquired Xing Yuan in Singapore and established Shin Chung Lin in Japan
Disposed all shares of Sino Ocean Land with net proceeds of HK$5.26 billion, paid out special dividend of 35 HK cents per share
COSCO Kansai started to build a new plant in Shanghai
Acquired 100% equity interest in Hanyuan in Germany to enlarge marine equipment supply network outside Asia
Acquired 51% equity interests in Yuan Hua in the USA
Jotun COSCO closed its old plant in Guangzhou and started production in its new plant in Qingdao
COSCO Kansai relocated its plant in Shanghai
Yuantong signed a strategic cooperation agreement with CSHT Marine Machinery Suppliers Ltd.
Strategic Transformation from a Conglomerate into a Shipping Services Provider
Acquired 100% equity interest in CSHT Marine Machinery Suppliers Limited
Jotun COSCO started to build a new plant in Qingdao
The Company’s name was changed to “COSCO SHIPPING International (Hong Kong ) Co., Ltd.
Subscription of 33% equity interest in NasurfarBiomaterial Technology (Changshu)
Entering into management services agreement with COSCO SHIPPING (Hong Kong)
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This presentation contains certain forward-looking statements with respect to the financialposition, results of operations and business of COSCO SHIPPING International and certainplans and prospects of the management of COSCO SHIPPING International.
Such forward-looking statements involve known and unknown risks, uncertainties andother factors which may cause the actual result or performance of COSCO SHIPPINGInternational to be materially different from any future results or performance expressed orimplied by such forward looking statements. Such forward-looking statements are based onnumerous assumptions regarding COSCO SHIPPING International’s present and futurebusiness strategies and the political and economic environment in which COSCOSHIPPING International will operate in the future.
The representations, analysis and advice made by COSCO SHIPPING International in thispresentation shall not be construed as recommendations for buying or selling shares ofCOSCO SHIPPING International. COSCO SHIPPING International shall not beresponsible for any action or non-action made according to the contents of this presentation.
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