COSCO Shipping International bunker trading volume drop 99% in 1H 2019

The marine fuels arm of COSCO SHIPPING International (Hong Kong) Co., Ltd saw a 99% fall in traded volume for the six months ended 30th June (1H) 2019 due to risk factors, it said in the latest earnings results.

Loss before income tax from the firm’s marine fuel and other products segment in 1H 2019 was HK $9,039,000 (approx. US $1,152,000), compared to profit of before income tax of HK$7,619,000 during the similar period last year.

Revenue from the similar segment during 1H 2019 was HK $23,427,000, 99.3% down from revenue of HK $3,309,419,000 in 1H 2018; the segment traded 6,277 metric tonnes (mt) of marine fuels, compared to 1,047,818 mt in the respective periods.

“In view of the liquidation filed by Coastal Oil Singapore Pte Ltd, a major supplier of Sinfeng Marine Services Pte. Ltd. (Sinfeng), at the end of 2018 (Coastal Oil’s Liquidation), the Group purposely trimmed down Sinfeng’s business in order to further prevent and control risks, which resulted in an impact on the business,” it stated.

Meanwhile, COSCO SHIPPING International pointed out its investment in bunker associate Double Rich Limited resulted in a loss of HK $6,870,000 during 1H 2019 compared to profit of HK $5,072,000 in 1H 2018, “mainly attributable to factors including weak demand for fuel oil and oil price fluctuation”.

Double Rich, which earlier signed a low sulphur fuel oil (LSFO) agreement with COSCO Shipping Lines, is a company principally engaged in the trading of fuel and oil products and marine fuel supply services in Hong Kong.

Overall, COSCO SHIPPING International recorded net profit of HK $150,025,000 in 1H 2019, 18% lower than net profit of HK $184,034,000 during 1H 2018.

Revenue in 1H 2019 decreased by 66% to HK $1,625,976,000 from HK $4,787,645,000 in 1H 2018 due to a 72% drop in revenue from its core shipping services business, which included its bunkering segment, to HK $1,256,075,000 during the comparative period.

“For trading and supply of marine fuel and related products, the Group will further strengthen the risk prevention and control to maintain low risk and high stability as major tasks, and will also carefully examine the medium to long-term strategic positioning of relevant businesses to enhance capital efficiency with a pragmatic attitude,” it said moving forward.

Related: Coastal Oil Singapore to wind up Coastal Oil Holdings
Related: Double Rich signs LSFO supply agreement with Cosco Shipping Lines
Other related: Sinfeng FY2018 revenue up despite 17% fall in marine fuel sales

Photo credit: Manifold Times
Published: 22 August, 2019