FY2009 Results: Financial Year ended 31 December 2009



Highlights:

• Group remained profitable even as the global financial crisis took heavy toll on the shipping industry.
• Turnover from shipyard operations dipped 13.9% to $2.8bn as ship repair and conversion projects were adversely affected by the global economic meltdown.
• Turnover from dry bulk shipping business decreased 48.4% to $132.9m due to lower charter-hire rates.
• Net profit attributable to equity holders of the Company fell 63.6% weighed down by higher operational costs and unfavorable business climate.
• Group resolved on seizing growth opportunities through shipyard capability expansion and operating efficiency enhancement.

SINGAPORE (22 February 2010) – Singapore Exchange (“SGX”) mainboard-listed COSCO Corporation (Singapore) Limited (“COSCO” or the “Company”), a leading ship repair & marine engineering and shipping group, today announced its financial results for the full year ended 31 December 2009.

Group’s turnover fell 16.6% to $2.9 billion in FY 2009 on lower revenue across all segments precipitated by the global financial crisis. Turnover from shipyard operations dipped 13.9% to $2.8 billion in FY 2009 as ship repair and conversion projects were adversely affected by the global economic meltdown. Turnover from dry bulk shipping business slipped 48.4% to $132.9 million in FY 2009 as expired long-term charters were leased on short-term basis at new lower rates.

Gross profit slid 52.8% from $630.1 million in FY 2008 to $297.6 million in FY 2009 on lower dry bulk shipping charter rates and lower profit contributions from ship repair, ship building and marine engineering business weighed down by higher operational costs and a thorny business climate. As a result, net profit attributable to equity holders of the Company decreased 63.6% from $302.6 million in FY 2008 to $110.1 million in FY 2009.

Mr. Jiang Li Jun, Vice Chairman and President of the Company said, “As the global economies pick up the pieces, our Group is keeping our eyes peeled on positioning ourselves to take advantage of the opportunities out there. Key to our long-term growth strategy is our commitment to expanding and upgrading our shipyard capabilities and efficiencies. Group newly formed COSCO Qidong, which has offshore marine engineering capabilities, is expected to make significant contributions as more of its new facilities are completed.”

The Baltic Dry Index (BDI), a measure of commodity shipping costs, rebounded from a low of 772 points at the beginning of 2009 to 3,005 points at the end of 2009 with the year’s average of 2,600 points. While the shipping industry fundamentals appear to be improving in general, the Group expects freight rates to remain volatile as any rise driven by the increase in global demand for bulk commodities may be dampened by potential downward pressure from the abundant supply of new ships.

“Our Group remains cautious about our 2010 outlook given the precarious and imbalanced global economic recovery currently underway. The IMF has forecasted a 3.9% global growth for 2010 to be led by Asian countries. As we sail past the worst of the economic headwinds, we expect further challenges ahead given the divergence in rebound in the advanced and developing countries, the continued weak private demand and credit constraints, and the unsettling talks of withdrawals of pump priming measures by various governments.” Mr. Jiang added.

Even as the shipping industry begins rising from the rubbles, the Group’s shipbuilding segment faces a bumpy road in the foreseeable future as the sector struggles through a slow recovery. The Group has an order book of US$ 5.6 billion as of 31st December 2009 with progressive delivery up to 2012 which is expected to keep the Group’s shipyards busy. This order book is subject to revision from any cancellation of orders or new orders that may arise. The Group has to-date delivered 13 bulk carriers, 1 heavy lift vessel, 1 accommodation barge and the Sevan Driller, the world’s first cylindrical deep-sea drilling unit. It will continue to focus on the delivery of more vessels in 2010 as the Group’s shipyards gain more experience in its diversified businesses. The Group expects that external business environment to be challenging in 2010 amidst continuing economic uncertainties. Barring any unforeseen circumstances, the Group expects to stay profitable in 2010.

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.

Cosco Corporation (Singapore) Limited