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NRA Capital Pte Ltd

Written by: NRA Team

Tuesday 13 Jan 2015

COSCO Corporation - press release

COSCO Corp Ltd shares down after profit warning

Plunging oil prices already pressured COSCO

Following a profit warning issued on 9 Jan, COSCO Corporation (Singapore) Limited dropped 8.33% from 60 cents to 55 cents. The fall continued well into the week, with no price recovery registered despite fluctuating oil prices that resulted from mixed messaging on the macroeconomic front. 

The fall in COSCO is in line with the Singapore offshore marine industry, COSCO has been negatively affected by the steep fall in crude price. Slackening demand for offshore services due to reduced oil prices (and hence expected profitability) was already pressuring COSCO, down 20% from its 2014 high of 74 cents. 

As announced earlier in July 2014 that the buyer for the COSCO Octabuoy semi-submersible hull, ATP Oil and Gas (UK), was insolvent and unable to take delivery of the hull. After searching in vain for a replacement buyer, COSCO decided to discontinue construction of the hull, taking a one-off S$90m impairment charge . 

Full year results for COSCO will be announced on February 16. 

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