1Q2015 Results 30 April 2015 China COSCO Holdings Company Limited
Disclaimer This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of China COSCO and certain plans and prospects of the management of China COSCO. Such forward-looking statements t t involve known and unknown risks, ik uncertainties and other factors which may cause the actual result or performance of China COSCO to be materially different from any future results or performance expressed or implied by such forward looking statements. t t Such forward- looking statements are based on numerous assumptions regarding China COSCO s present and future business strategies and the political l and economic environment in which h China COSCO will operate in the future. The representations, analysis and advice made by China COSCO in this presentation shall not be construed as recommendations for buying or selling shares of China COSCO. China COSCO shall not be responsible for any action or non-action o made according to the contents ts of this presentation. 2
Agenda Financial Review* Market & Operational Review Market Outlook * The quarterly financial report is in accordance with Chinese Enterprise Accounting Standards and unaudited. 3
Part I Financial Review
Summary Profit & Loss RMB million 1Q2015 1Q2014 YoY Revenues 14,835 14,209 +4.4% Cost of services 14,018 13,476 +4.0% Gross profit 816 733 +11.4% Gross profit margin 5.5% 5.2% +0.3PPs Administration expenses 913 915-0.2% Finance costs 586 777-24.6% Investment income 366 395-7.4% Operating profit -360-597 +39.8% Non-operating income* 74 90-17.4% Non-operating expenses* 343 994-65.5% Total profit -629-1,502 +58.1% Income tax expenses 100 124-19.1% Net profit -729-1,625 +55.2% Net profit attributable to equity holders -1,029-1,880 +45.3% Net profit, excluding non-recurring profit and loss -1,003-1,463 +31.5% * In 1Q2015, 22 old vessels were scrapped and the net disposal loss was RMB 248 mn (RMB 265 mn disposal loss and RMB 17 mn disposal gain were recorded in non-operating expenses and income respectively). In 1Q2014, 16 old vessels were scrapped and the net disposal loss was RMB 794 mn. 5
Summary Balance Sheet RMB million 2015-3-31 2014-12-31 Change Current assets 48,723 50,843-4.2% Non-current assets 97,384 97,977-0.6% Total assets 146,107 148,820-1.8% Current liabilities 36,390 35,399 +2.8% Non-current liabilities 67,568 70,464-4.1% Total liabilities 103,957 105,862-1.8% Capital and reserves attributable to the equity holders of the Company 23,328 24,379-4.3% Total equity 42,150 42,958-1.9% 6
Summary Cash flow RMB million 1Q2015 1Q2014 Cash & Cash Equivalents-Beginning i i 39,706 48,206 Net cash Inflow (outflow) from Operating activities 1,109109-128 Investing activities -484 817 Financing activities -2,703-1,048 Exchange gains/(losses) -34 236 Net increase (decrease) in cash and cash equivalents -2,113-123 Cash & Cash Equivalents-Closing 37,593 48,083 7
Part II Market and Operational Review
Market Review CCFI 2,500 BDI 1,200 1,100 1,000 900 1Q2014 Ave. 1,117 5.2 % YoY 1Q2015 Ave. 1,058 2,000 1,500 1,000 1Q2014 Ave. 1,371 55.2% YoY 1Q2015 Ave. 614 800 700 500 600 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 USD/Ton 800 600 1Q2014 Ave. 610 Bunker Price (SGP 380CST) 48.1% YoY 1Q2015 Ave. 317 0 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 CCFI: China Container Freight Index (Source: Shanghai Shipping Exchange) BDI: Baltic Dry Index (Source: Baltic Shipping Exchange) 400 200 0 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 9
Container Shipping Cargo Volume & Revenue Cargo Volume Revenue 000TEU RMB million 3,000 12,000 2,500 2,000 1,500 9,000 6,000 1,000 500 0 3,000 1Q2014 1Q2015 1Q2014 1Q2015 0 1Q2015 1Q2014 YoY Cargo volume ( 000 TEU) 2,344 2,079 +12.8% Unit Income (RMB) 4,415 4,433-0.4% Revenue from container shipping and related business (million RMB) 11,679 10,013 +16.6% 10
Container Shipping Capacity Current Capacity* Total capacity as of 31 Mar. 2015 177 vessels / 848,478 TEUs (+12.2% YoY) (Average age 9.3 years) < 3000TEU 1,200,000 1,000,000 800,000 TEU Future Capacity 848,478 893,972 903,952 959,851 965,475 3000-5000TEU 86,408 10% 600,000 400,000 50.8% 5000-8000TEU 155,809 19% 172,042 20% 434,219 51% > 8000TEU 200,000 0 49.2% 1Q2015 2015 2016 2017 2018 Owned Chartered-in New Vessel Orderbook as of 31 Mar. 2015 Scrapped & Newly Delivered Capacity in 1Q2015 No. of Vessels TEU Scrapped 6 4,800 Newly Delivered - - No. of Vessels TEU Delivery Schedule 10 117,960 2016-2018 * Chartered-out capacity (5 vessels/ 42,476 TEUs) is not included. 11
Dry Bulk Shipping Cargo Volume Cargo Volume (million tons) 42-6.1% 39 Grain 10% Coal 35% Cargo Volume (billion ton-miles) 203-10.0% 182 Ores 44% 1Q2014 1Q2015 1Q2014 1Q2015 Operation days Average T/C Equivalent Revenue per Day Operation days 1Q2015 1Q2014 YoY Average TCE (USD/day) 1Q2015 1Q2014 YoY Inter -national Capesize 4,620 5,586-17% Panamax 6,079 7,986-24% Handymax 6,942 7,601-9% Handysize 1,353 1,742-22% Sub-total 18,994 22,914-17% Domestic 1,661 2,362-30% Total 20,655 25,277-18% Inter -national Capesize 12,574 16,067-22% Panamax 5,726 9,482-40% Handymax 5,870 9,245-37% Handysize 4,976 6,992-29% Average 7,391 10,819-32% Domestic 5,080 5,746-12% Total average 7,205 10,345-30% 12
Dry Bulk Shipping Capacity No. of Vessels Capacity as of 31 Mar. 2015 Owned vessels Chartered-in vessels Total DWT 000 Age (Year) No. of Vessels DWT 000 No. of Vessels Capesize 35 7,583 7.01 16 2,853 51 10,436 DWT 000 YoY Capacity Change (mn DWT) Owned 18 15 Chartered-in Panamax 48 3,850 9.93 28 2,205 76 6,056 Handy 75 3,721 13.01 19 901 94 4,622 9 6 Total 158 15,155 10.74* 63 5,959 221 21,114 * The average age of owned vessels as of 31 Dec. 2014 was 11.62 years. 1Q14 1Q15 1Q14 1Q15 Scrapped & Newly Delivered Capacity in 1Q2015 No. of Vessels DWT 000 Scrapped 16 1,067 Newly Delivered 0 0 New Vessel Delivery Schedule as of 31 Mar. 2015 No. of Vessels 2015 2016 2017+ Total DWT 000 No. of Vessels DWT 000 No. of Vessels DWT 000 No. of Vessels DWT 000 Capesize 1 180 3 540 4 832 8 1,552 Panamax 2 156 1 82 5 410 8 648 Handy 7 352 11 500.4 6 344.8 24 1,197.2 Total 10 688 15 1,122.4 15 1,586.8 40 3,397.2 13
Terminals Equity throughput 4,580,381 TEU +4.9% YoY % of total Total throughput h t 16,471,466 TEU +6.6% YoY % of total Overseas +9.4% YoY +1.1% YoY 25.4% Bohai Rim 37.4% Bohai Rim -2.8% YoY 25.3% Pearl River Delta +12.7% YoY 27.1% Pearl River Delta +13.6% YoY 24.5% Yangtze River Delta +4.2% YoY 15.2% Yangtze River Delta -2.2% YoY 14.6% Overseas +9.9%YoY 14.5% Southeast Coast and Others +6.1% YoY Southeast 10.2% Coast and Others +17.5% YoY 5.8% 14
Container Leasing New container purchase: 38,814 TEU (1Q 2014: 62,500 TEU) Intense competition continued CAPEX: US$69.2 m average price: US$ 1,784 /TEU 2015 Budget 165,000 TEU Long-term lease remained our strategic focus for stable income growth Long-term leases accounted for 96.5 % (1Q 2014: 96.2 %) of the Group s total revenues from container leasing in 1Q 2015 Container fleet mix Fleet size: 1,930,218 TEU, +0.5 % YoY Owned fleet: 1,121,828 TEU, (COSCON: 48.3 %; Non-COSCON: 51.7 %), 58.1 % of total fleet Sale-and-leaseback and leaseback fleet: 286,568 TEU (COSCON: 100 %), 14.9 % of total fleet Leasing revenue generating fleet (Owned + sale-and-leaseback): 1,408,396 TEU, +1.9 % YoY Managed fleet: 521,822 TEU (Non-COSCON: 100 %), 27.0 % of total fleet Container leased to COSCON: 42.9 % of total fleet; 58.9 % of leasing revenue generating fleet 15
Part III Market Outlook
Market Outlook-Container Shipping Demand and Supply 15% 10% 5% 0% Volume Growth Capacity Growth 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-5% -10% -15% Capacity Growth (%) Volume Growth (%) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 13.6 11.8 10.9 4.9 8.1 6.8 4.9 4.7 5.6 6.2 11.2 11.4 4.3-9 12.8 7.2 3 4.9 6.0 6.6 Source:CLARKSON 17
Market Outlook-Dry Bulk Shipping Demand and Supply 20% 15% 10% 5% 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Capacity Growth Volume Growth -5% Capacity Growth (%) Volume Growth (%) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 6.7 6.6 6.7 10.0 17.0 14.9 10.6 5.7 4.4 4.1 6.9 7.7 2.9-2.8 12.1 6.5 6.7 5.7 4.0 3.1 Source:CLARKSON 18
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Appendix
Company Structure A Shareholders 21.9% H Shareholders 25.3% COSCO Group 52.8% China COSCO Holdings Company Limited 100% 100% 44.54% COSCON China COSCO Bulk COSCO Pacific (1199.HK) Container shipping Dry Bulk shipping Terminals Container leasing In June 2005, China COSCO (1919.HK) was listed and commenced trading on the Stock Exchange in Hong Kong. In June 2007, China COSCO (601919.SH) was listed and commenced trading on the Stock Exchange in Shanghai. 21
Historical Segment Results Container Shipping Operating Profit (RMB mn) Operating Profit Margin 5,045 3,705 13% 3,624 12% 1,632 1,656 8% 4% 4% 1,016 292 1% -3% -2% 2% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-1,529-988 -15% -28% -7,813-6,359 22
Historical Segment Results Dry Bulk Shipping Operating Profit (RMB mn) 21,231 Operating Profit Margin 12,642 8,135 9,202 7,587 43% 27% 29% 28% 18% 3,024 474 9% 2% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-1,698-1,045-23% -8% -12% -5,425-49% -7,774 23