COSCO SHIPPING Holdings Co., Ltd. 2016 Annual Results

31 March 2017

Contents Part 1

Highlights

Part 2

Financial Review

Part 3

Market & Business Review

Part 4

Market Outlook & Development Strategy

1

COSCO SHIPPING Holdings Co., Ltd. Part 1 Highlights

2016 Annual Results Quarterly Performance Business Restructuring

2

Highlights - Overwhelming pressure in a tough market

Key Financials

2016

RMB(mn)

20151

RMB(mn)

YoY

Revenues

69,833

55,148

26.6%

Cost of services

70,383

51,425

36.9%

Gross loss(-)/profit

-550

3,723

-114.8%

Gross loss(-)/profit margin

-0.79%

6.75%

-7.54 PPs

Operating loss(-)/profit

-5,041

1,732

-

loss(-)/profit attributable to equity holders

-9,906

469

-

Basic EPS(RMB)

-0.97

0.05

-

Net cash flows generated from operating activities

1,520

7,118

-78.6%

2016/12/31

RMB(mn)

2015/12/31

RMB(mn)

YoY

Equity attributable to the equity holders of the Company

18,323

28,560

-35.8%

Net debt

25,188

52,574

-52.1%

Total equity

37,549

53,171

-29.4%

Net debt to total equity ratio

67.08%

98.88%

-31.8 PPs

  1. The comparative information of FY2015 financial statements has been restated considering the disposal of the dry bulk shipping and the container leasing businesses and the acquisition of entities whose parent company is China Shipping Group in FY2016.

    3

    Q1

    RMB(mn)

    Q2

    RMB(mn)

    Q3

    RMB(mn)

    Q4

    RMB(mn)

    Revenue

    13,282

    16,285

    18,945

    21,320

    Net loss(-)/profit attributable to equity holders

    -4,484

    -2,725

    -2,011

    -686

    Net loss(-)/profit attributable to equity holders (excluding extraordinary items)

    -2,144

    -2,677

    -1,998

    -276

    Net cash flows generated from operating activities

    -578

    622

    -626

    2,102

    25,000

    Highlights - Results improved quarterly

    20,000

    18,945

    21,320

    15,000

    13,282

    16,285

    10,000

    5,000

    Revenue

    Net loss attributable to equity holders (excluding extraordinary items)

    0

    -5,000

    -2,144 -2,677-1,998

    Q1 Q2 Q3 Q4

    -276

    Note: The quarterly results were in accordance with Chinese Enterprise Accounting Standards4

    Pre-restructuring

    Highlights - Key transactions completed in 1Q 2016

    Key transactions

    COSCO Group

    China Shipping Group

    51%

    1. China COSCO* to operate vessels and containers

      leased from CSCL and acquire network assets

      from CSCL

      China COSCO

      CSCL

      49%

      Holdings 2

      (2866.HK) CS Terminal

      • COSCO Container Lines and CSCL signed leasing contracts of container ships and containers on 1

      100% 100%

      44.83%

      COSCO

      Container Lines

      Post-restructuring

      COSCO SHIPPING Lines

      100%

      COSCO

      Bulk

      1

      COSCO

      Pacific

      FLORENS

      (Container 4

      China COSCO SHIPPING

      Corporation Limited

      Leasing)

      COSCO Group

      100%

      COSCO SHIPPING Holdings A+H

      601919.SH / 1919.HK

      45.47%

      3

      COSCO SHIPPING Ports (COSCO Pacific, 1199.HK)

      46.72%

      March 2016, representing the official business

      integration of the two companies.

      • The acquisition of CSCL's network assets: the

        acquisition of 33 companies completed on 30

    2. China COSCO* to sell dry bulk business to COSCO Group

      • Completed on 15 March 2016

    3. COSCO Pacific** to acquire port assets held by China Shipping Group and CSCL

      • Completed on 18 March 2016

    4. COSCO Pacific** to sell container leasing business (Florens) to CSCL

      • Completed on 24 March 2016

        New Strategic Positioning and Objectives

        • Transition from an integrated shipping conglomerate to a pure player in container shipping value chain

        • To become a world-class container shipping and port service provider with its continuing efforts to build up a global network, provide customers with integrated solutions and create higher return for shareholders

      * China COSCO Holdings changed its company name to "COSCO SHIPPING Holdings Company Limited" on 4 Nov 2016.

      ** COSCO Pacific (1199.HK) changed its company name to "COSCO SHIPPING Ports Limited" on 22 Jul 2016.

      ***COSCO Container Lines changed the name to "COSCO SHIPPING Lines" in Nov 2016.

      5

      COSCO SHIPPING Holdings Co., Ltd. Part 2 Financial Review

      Consolidated Income Statement

      Segment Results

      Consolidated Balance Sheet Consolidated Cash Flow

      6

      2016

      RMB(mn)

      2015

      RMB(mn)

      YoY

      Revenues

      69,833

      55,148

      26.6%

      Cost of services

      -70,383

      - 51,425

      36.9%

      Gross loss(-)/profit

      -550

      3,723

      -

      Gross loss(-)/profit margin

      -0.79%

      6.75%

      -7.54 PPs

      Subsidy for vessel demolition

      109

      1,549

      -93.0%

      loss(-)/gain on disposal of vessels, net1

      -1,038

      -237

      338.0%

      Other expense(-)/income, net

      -470

      1,461

      -

      Selling, administrative and general expenses2

      -4,021

      -3,452

      16.5%

      Operating loss(-)/profit

      -5,041

      1,732

      -

      Finance income

      500

      802

      -37.7%

      Finance costs

      -1,913

      -1,861

      2.8%

      Net related exchange loss(-)/profit3

      -402

      -487

      -17.5%

      Net finance costs

      -1,815

      -1,546

      17.4%

      Share of loss(-)/profits of JCE & associates

      1,400

      1,556

      -10.1%

      loss(-)/Profit before income tax (EBT)

      -5,456

      1,742

      -

      Income tax expenses

      -506

      -531

      -4.6%

      loss(-)/profit from continuing operations

      -5,963

      1,211

      -

      loss(-)/profit on disposals of subsidiaries4

      -2,430

      -

      -

      loss(-)/profit from discontinued operations

      -3,139

      997

      -

      loss(-)/Profit for the year

      -9,101

      2,209

      -

      loss(-)/profit attributable to equity holders

      -9,906

      469

      -

      Financial Review - Consolidated Income Statement

      1. During the reporting period, the Group disposed of 16 container vessels, including: demolition of 14 vessels and sales of 2 vessels.

      2. A significant reason for the increase in the administrative expenses as compared to the same period of last year is a 41.9% increase of the legal and professional fees mainly in connection with the restructuring incurred in 2016.

      3. In 2016, narrowed exchange loss was mainly because that the structure of company's bank deposits and loans was adjusted to avoid exchange rate risks.

      4. Net loss on disposal of subsidiaries was due to the disposal of COSCO Bulk Group and Florens.

      5. 7

        Financial Review - Segment Results

        Segment Revenues (from external customers)

        2016

        RMB(mn)

        2015

        RMB(mn)

        YoY

        Continuing operations

        Container shipping and related business

        66,569

        52,051

        27.9%

        Terminal and related business

        3,762

        3,495

        7.6%

        Discontinued operations

        Dry bulk shipping and related business

        1,117

        9,008

        -87.6%

        Container leasing and related business

        477

        1,967

        -75.7%

        Terminal and related business; 5%

        Dry bulk shipping and related business; 1%

        Container leasing and related business; 1%

        Container shipping and related business; 93%

        Segment loss(-)/profit

        2016

        RMB(mn)

        2015

        RMB(mn)

        YoY

        Continuing operations

        Container shipping and related business

        -6,142

        782

        -

        Terminal and related business

        1,495

        1,451

        3.0%

        Discontinued operations

        Dry bulk shipping and related business

        -556

        1,214

        -

        Container leasing and related business

        83

        669

        -87.7%

        8

        Financial Review - Consolidated Balance Sheet

        2016/12/31

        RMB(mn)

        2015/12/31

        RMB(mn)

        Change

        Non-current assets

        74,290

        113,850

        -34.7%

        Current assets

        45,362

        46,643

        -2.7%

        Total assets

        119,653

        160,493

        -25.4%

        Non-current liabilities

        48,549

        77,147

        -37.1%

        Current liabilities

        33,555

        30,175

        11.2%

        Total liabilities

        82,104

        107,322

        -23.5%

        Equity attributable to the equity holders of the Company

        18,323

        28,560

        -35.8%

        Total equity

        37,549

        53,171

        -29.4%

        Net current assets

        11,807

        16,468

        -28.30%

        Total borrowings

        57,377

        86,472

        -33.6%

        Cash and cash equivalents

        32,189

        33,897

        -5.0%

        Net debt

        25,188

        52,574

        -52.1%

        Net debt to total equity ratio

        67.1%

        98.9%

        -31.8 PPs

        9

        Financial Review - Consolidated Cash Flow

        2016

        RMB(mn)

        2015

        RMB(mn)

        Change

        Net cash flows generated from operating activities

        1,520

        7,118

        -5,598

        Net cash flows generated from investing activities1

        4,986

        -6,703

        11,689

        Net cash flows generated from financing activities2

        -9,498

        -8,480

        -1,018

        Net cash inflows in the year

        -2,992

        -8,066

        5,074

        Net related exchange gain/loss(-)

        1,283

        1,014

        270

        Net increase in cash and cash equivalents

        -1,709

        -7,052

        5,343

        Add: Cash & cash equivalents-Beginning

        33,897

        40,949

        -7,052

        Cash & cash equivalents-Closing

        32,189

        33,897

        -1,709

        1. Cash received from the disposals of COSCO Bulk and Florens in 2016 amounted to RMB9.5bn. Cash payment of RMB6.3bn was applied in the purchase and construction of fixed assets, intangible assets and other long-term assets.

        2. Cash payments related to financing activities made during the year amounted to RMB9.0bn, which were primarily cash payments made for the acquisition of the relevant agency companies and terminal companies China Shipping Group and the acquisition of shares in COSCO SHIPPING Ports from the secondary market to increase shareholding.

        10

        COSCO SHIPPING Holdings Co., Ltd. Part 3 Market & Business Review

        Market Review

        Container Shipping and Related Business

        Terminal and Related Business

        11

      China COSCO Holdings Company Limited published this content on 01 April 2017 and is solely responsible for the information contained herein.
      Distributed by Public, unedited and unaltered, on 06 April 2017 10:14:13 UTC.

      Original documenthttp://en.chinacosco.com/attach/101/Presentation of 2016 Annual Results.pdf

      Public permalinkhttp://www.publicnow.com/view/B05B440288A1200200F3912D4A37A85E5E7FF28A