Cosco Corp (Singapore) sounds alarm with 84% plunge in Q3 net profit

Cosco Corporation (Singapore) has warned of choppy waters for the rest of the year as its third-quarter net profit sank 84 per cent to $4.2 million.

Profit fell despite Cosco logging a 6 per cent rise in turnover to $989.4 million, helped by increases in shipyard revenue.

The firm said the plunge in profit was due mainly to lower contributions from its dry bulk shipping and shipyard operations.

Higher inventory writedowns and provisions for expected losses recognised on construction contracts also dragged down profits.

Net allowance for inventory writedown for the three months to Sept 30 jumped to $15.8 million from last year's $790,000.

Net allowance for expected losses recognised on construction projects shot up to $33.9 million, as opposed to the $8.9 million reversal of expected losses in the same period last year.

Cosco said turnover from shipyard operations rose to $976 million in the third quarter from last year's $923.5million, thanks to growth in revenue from its marine engineering segment.

That more than offset the lower revenue contribution from its shipbuilding and ship repair segments.

Earnings per share came in at 0.19 cent as at the end of the third quarter, down from last year's 1.19 cents. Net asset value per share was 58.65 cents at the end of Sept 30, higher than the 57.23 cents at the end of Dec 31 last year.