P1247676908DjeAk - PowerPoint PPT Presentation

Title: P1247676908DjeAk


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COSCO International Holdings Limited
2006 Annual Results Announcement
2007. 4. 11
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Contents

• Results Highlights
• Financial Summary
• Business Review
• Future Outlook
• Development Strategy

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Results Highlights
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Continued Growth in Results

• Turnover of HK1,866 million, up 28
• Gross profit of HK474 million, up 27
• Profit attributable to equity holders of HK617
  million, up 24
• Basic EPS of HK42.90 cents, up 22
• If fair value gain on investment property and
  gain on deemed disposal of partial interest in a
  JCE not included
• Profit attributable to equity holders of HK333
  million, up 73
• EPS of HK23.14, up 70

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Reinforce Positioning As A Ship Trading
Supplying Services Provider

• Turnover of ship trading and supplying services
  amounted to HK
• 1,636 million, up 22
• Further expand its core businesses by
• Forming a JV with Japan Kansai to build a new
  coatings plant in Zhuhai with an annual designed
  capacity of 24,000 tonnes and can be expanded to
  36,000 tonnes. Production is planned to commence
  in Jul 2007
• Injecting working capital to Jotun COSCO on a
  pro-rata basis so as to increase its operating
  capability and expand its business
• Shenzhen COSCO Insurance Brokers commenced
  business in order to explore marine insurance
  brokerage business in China

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Enhance Business Structure by Disposal of
Non-core Businesses

• Disposal of Non-core business and an equity JV
• Disposal of 54 interest in a power plant
  operated
• by Henan XinzhongYi
• Disposal of 10 interest in International Paint
  
• Disposal of 100 interest in Kingswell Garden
  in Shanghai
• Disposal of 100 interest in building
  construction business operated by COSCO
  International Construction (2007 Q1)

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Financial Summary
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Income Statement Highlights
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Segment Turnover
Strong Growth in Ship Trading Supplying
Services with an increase of 22. Coatings
business recorded outstanding results.
As the Company entered into a sale and purchase
agreement with a connected person through its
wholly owned subsidiary to dispose of its entire
share capital of COSCO International Construction
Limited on 5th February 2007. In accordance with
No.5 of HKFRS, the Company reclassified the
financial results and assets and liabilities of
related business as Discontinuing Operations
and presented separately with other continuing
operations. In addition, figures in 2005 have
been restated in regard to the Discontinuing
Operations.
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Segment Turnover
Revenue from Ship Trading Supplying Services is
a major income source, which accounted for 88 of
the total turnover
HK Million
Turnover HK1,866million
Turnover HK1,457 million
2005
2006
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Segment Results
Profit before income tax of HK677m, up 37 If
gain on deemed disposal of partial interest in
SORED was excluded , profit before income tax of
ship trading supplying services accounted for
45 of total profit before income tax
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Balance Sheet Financial Ratios Highlights
Strong financial position with cash cash
equivalents of HK862m, ROA and ROE of 18.9 and
32.5 respectively.
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Business Review
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Ship Trading and Supplying Services
(1) Ship Trading Agency Services

• Sole ship trading agency to
• COSCO Group
• Agent for buying and selling
• of a total of 84 vessels
• Vessel trading volume was
• 6.14 million DWT, up 123
• Commission income for new
• build orders traded during the year will be
  recognized in the following years upon the
  delivery of the vessels

HK million
2
54
53
5
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Ship Trading Commission Income
Commission income from Non-COSCO companies
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Ship Trading and Supplying Services (Contd)
(2) Marine Insurance Brokerage Services
HK million

• The only insurance brokerage within COSCO Group
• One of the few Lloyds insurance brokers based in
  HK
• Satisfactory results from Shenzhen COSCO
  Insurance Brokerages during the year

43
13
38
20
18
2005
2006
Insurance Brokerage Commission Income
Commission income from Non-COSCO companies
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Ship Trading and Supplying Services (Contd)
(3) Sales of Marine Equipment, Spare Parts and
Communications and Navigation system
HK million
11

• Mainly supply marine equipment and spare parts,
  marine communications and navigation equipment
  and spare parts
• Turnover decreased by 11 due to the change in
  equipment procurement cycle by the ship owners

350
312
24
23
Turnover
Turnover from Non-COSCO companies
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Ship Trading and Supplying Services (Contd)
(4) Production and Sales of Coatings
HK million

• Demand for container coating started to recover
  in the end of first quarter of 2006 and remained
  stable during the year
• Adjusted the selling prices to increase gross
  profit margin
• Strong growth in the demand for industrial
  anti-corrosion coating

1,228
36
903
Turnover of COSCO Kansai
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Ship Trading and Supplying Services (Contd)
(4) Production and Sales of Coatings (Contd)
COSCO Kansai Companies ranked No. 2 in terms of
market share in Chinas container coatings and
had a significant market share in Chinas
industrial anti-corrosion coatings
-1
28
46
contributed by Jotun COSCO
Industrial Anti-corrosion Coatings
Marine Coatings
Container Coatings
contributed by COSCO Kansai
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Property Development Property Investment
(1) Shenyang COSCO Yihe

• Sold 525 residential units with a GFA of
  approximately 56,600 square meters for the year
  and average selling price was RMB3,940/m2
• Sold 1,268 residential units, together with
  commercial areas and parking spaces, a GFA of
  147,300 square meters sold as at 31 December 2006

(2) SORED

• Acquisition of additional 24 stake in SORED with
  a cash consideration of RMB 395 million was
  completed in October 2006
• After undergoing reorganisation, SORED issued new
  shares to certain independent third-party
  investors
• Resulted in the dilution of interest in SORED to
  30.8 and recorded a deemed disposal gain of
  HK279M
• Contributed a profit of HK153m to the Company

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Future Outlook
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Future Outlook Ship Trading Insurance
Brokerage

• Global economy will maintain a stable growth.
• China foreign trade will maintain a double digit
  growth, underlying factors for shipping market
  will remain optimistic.
• Massive new build orders resulted in delivery
  slots in shipyard are only available until 2010.
• Huge COSCO fleets with more than 700 vessels and
  a carrying capacity of 45 million DWT, which will
  continue to increase the demand for ship trading
  and supplying services.
• Great opportunities in the development of marine
  insurance brokerage business in COSCO Groups
  vessels flying the PRC national flag resulted
  from the opening of insurance market in the PRC.
• Ship building and equipment manufacturing
  industries are two major industries to be
  developed for the coming five years. More and
  larger vessels will create more demand for ship
  trading and supplying services.

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Future Outlook - Coatings

• Number of containers manufactured in 2007 will
  not be less than that of 2006 and demand for
  container coatings will remain stable
• Phasing out of old single-hull tankers by 2010 as
  mandated by International Maritime Organizations
  will result in more new builds which will
  increase the demand for marine coatings
• According to Impact Marketing Consultants, demand
  for marine coatings will increase by 30 in 2007
• The construction of more infrastructure projects
  in China such as power plants, port facilities,
  roads and bridges will greatly increase the
  demand for the high margin industrial
  anti-corrosion coatings

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Future Outlook - Property Development

• Austerity measure on property will result in a
  more transparent and regulated policies
  implementation
• Strict implementation of LAT will have limited
  impact on large-size developers
• Small-size, inefficient and weak financial
  position developers will be squeezed out of the
  market. High entry barriers will benefit
  large-size, well-experienced and branded
  developers
• Demographic change includes increasing
  residential mobility and reduced household sizes,
  as well as urbanisation uptrend results in
  increasing households and growing housing demand
• Increase in national income, increase in housing
  demand and limited land supply will result in
  property price on an uptrend

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Development Strategy
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Reinforce the Positioning of Ship Trading
Supplying Services Provider
Our aim To construct a platform to provide
comprehensive and supporting services for our
customers, so as to create synergy through a
common customer base and create the best values.
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Strengthen Core Business

• Strengthen our position as a ship trading and
  supplying services provider by continuously
  acquiring or investing in quality assets related
  to ship trading and supplying services
• Strive to increase ship trading and supplying
  services contribution to total revenue and
  profits to more than 80 in the long-term
• Develop more businesses with non-COSCO customers
• Increase market share in COSCO Groups marine
  coatings consumption
• Maintain close relationship with container
  manufacturers to maintain market share in the top
  rank
• Hold stakes in SORED for a long-term purpose to
  maintain a stable profit earning base

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Thank You
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COSCO International Holdings Limited
2006 Annual Results Announcement
2007. 4. 11