COSCO Clinched High-Value Contracts
Totaling Approximately S$402.4 million
SINGAPORE (9 April 2008) – Singapore Exchange (“SGX”) mainboard-listed
COSCO Corporation (Singapore) Limited (“COSCO” or the “Company”), a leading
ship repair, shipbuilding & marine engineering and dry bulk shipping group, is pleased
to announce that its 51%-owned COSCO Shipyard Group (“CSG”) had won high-value
offshore and tanker building contracts totaling approximately S$402.4 million or
US$292.3 million.
CSG signed the new offshore platform contract worth RMB923 million (approximately
US$131.8 million or S$182.1 million) with an American owner for constructing a hull
of semi-submersible production unit. Though priced in Chinese-Yuan, the contract
provides that payment will be made in US-Dollar at the prevailing exchange rate on
payment date. The unit will be fabricated in COSCO Nantong Shipyard and its new
offshore construction facilities in Qidong. Deposit of US$3 million has been received
and the project is targeted for completion in 2010.
CSG had also been awarded a contract by a Danish owner to build two 59,000-dwt
shuttle tankers with total valued of €101.2 million (approximately US$160.5 million or
S$220.3 million). The two tankers will be constructed in COSCO Nantong Shipyard
and are scheduled to be delivered around June and December 2011. This is the second
shuttle tanker building contract of Cosco Nantong Shipyard after the yard secured
contract to build two 10,500-dwt shuttle tankers two months ago. The customer had
agreed to pay 65% of the contract value as first installment.
The Group also wishes to announce that it will not be proceeding with a US$202
million project to build a GM5000 semi-submersible rig hull for Norwegian owner -
Red Flag A.S. – announced on 21 May 2007. This is because one of the conditions of
the contract requiring deposits from the customer before work would commence has
not been fulfilled. The Group has not begun any work and has not incurred any cost on
the lapsed contract, and can now free up its busy shipyards for other projects. Deposits
and/or progress payments for all the Group’s other offshore projects have been received
and works are progressing as planned.
Mr. Ji Hai Sheng, Vice Chairman and President of the Company and Vice Chairman of
COSCO Shipyard Group said, “Our Group will concentrate on getting more high-value
jobs with a view of optimising the released capacity. In the light of higher labour and
steel costs, our Group will factor such rising costs in our pricing for future projects. To
minimise currency risks, we will going forward, try to have our contracts quoted in
Chinese-Yuan and Euro-Dollars in addition to US Dollars. Our clients would have the
option of settling Yuan-denominated contracts in US Dollars at the exchange rate
prevailing at the time of payment. As we continue to build on our strong order book,
our Group is closely monitoring our fast changing operating environment and will take
prompt actions wherever and whenever necessary to sustain growth and profitability”
None of the directors or controlling shareholders of the Company has any interest,
direct or indirect in the contracts.
The contracts are not expected to have material impact on the net tangible assets (NTA)
and earnings per share (EPS) of the Company for the year ending 31st December 2008.
About COSCO Corporation (Singapore) Ltd
Listed on the main board of the SGX, COSCO Corporation (Singapore) Ltd
(“COSCO”) is a leading ship repair, shipbuilding & marine engineering and dry
bulk shipping group. The Group owns 51% of the largest shipyard group in
China, COSCO Shipyard Group, and a fleet of 12 dry bulk carriers. It also
operates shipping agencies. COSCO is the listed subsidiary of China Ocean
Shipping (Group) Company, the largest shipping group in China.
Source: COSCO Corporation (Singapore) Limited
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