Cosco Shipping Intrntl Hongkong : 2018 Interim Results

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(Incorporated in Bermuda with limited liability)

(Stock Code: 00517)

2018 INTERIM RESULTS

RESULTS AND OPERATION HIGHLIGHTS

• .Profit attributable to equity holders decreased by 10% to HK$184,034,000 as compared to the same period of 2017. Such decrease was mainly due to the decrease in share of profits of joint ventures.

• .Revenue increased by 26% to HK$4,787,645,000 as compared to the same period of 2017 which was mainly attributable to the increase in segment revenues of coatings, marine fuel and other products and general trading.

• .Gross profit increased by 1% to HK$305,636,000 as compared to the same period of 2017. Gross profit margin decreased to 6.4% which was mainly attributable to the increase in revenue from the low-gross-profit-margin marine fuel and other products as well as the decrease in gross profit margin of coatings segment.

• .Profit before tax from core shipping services business decreased by 25% as compared to the same period of 2017 to HK$127,978,000.

• .Basic and diluted earnings per share was 12.01 HK cents, decreased by 10% as compared to the same period of 2017.

• .The Board has declared an interim dividend of 5 HK cents per share.

• .The Group had net cash (represented total deposits and cash and cash equivalents less short-term borrowings) of HK$6,301,251,000 as at 30th June 2018 for the expansion of existing businesses and the support of future strategic development.

The board of directors (the''Board''or the''Director(s)'') of COSCO SHIPPING International (Hong Kong) Co., Ltd. (the''Company''or''COSCO SHIPPING International'') is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (collectively, the''Group'') for the six months ended 30th June 2018. The unaudited condensed consolidated results have been reviewed by the audit committee of the Company (the''Audit Committee'').

The Group's unaudited condensed consolidated income statement, unaudited condensed consolidated statement of comprehensive income, unaudited condensed consolidated statement of financial position and explanatory notes 1 to 15 as presented below are extracted from the Group's unaudited condensed consolidated interim financial information for the six months ended 30th June 2018 (the''Unaudited Condensed Consolidated Interim Financial Information''), which has been reviewed by the Company's independent auditor, PricewaterhouseCoopers, in accordance with Hong Kong Standard on Review Engagements 2410''Review of Interim Financial Information Performed by the Independent Auditor of the Entity''issued by the Hong Kong Institute of Certified Public Accountants.

CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 30th June 2018

Unaudited

Six months ended 30th June

2018

2017

Note

HK$'000

HK$'000

Revenue Cost of sales

4

4,787,645 (4,482,009)

3,809,258 (3,507,225)

Gross profit

305,636302,033

Other income and gains-net

5

75,93465,721

Reversal of provision/(provision) for impairment of trade receivables, net of (provision)/reversal Reversal of provision for impairment of other receivables Selling, administrative and general expenses

2,331 17,815 (256,809)

(1,705)

-(232,956)

Operating profit

Finance income Finance costs

Finance income-net

6 7 7 7

144,907133,093

76,15059,389

(1,238)(3,311)

74,91256,078

Share of (losses)/profits of joint ventures Share of profits of associates

(7,492)35,126

5,1426,123

Profit before income taxIncome tax expenses

8

217,469 (29,026)

230,420 (22,876)

Profit for the period

188,443207,544

Profit attributable to:

Equity holders of the Company Non-controlling interests

184,034205,562

4,4091,982

188,443207,544

Earnings per share attributable to equity holders of the

Company during the period-basic and diluted, HK cents

9

12.01

13.41

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the six months ended 30th June 2018

Unaudited

Six months ended 30th June

2018	2017
HK$'000	HK$'000
Profit for the period	188,443	207,544
Other comprehensive (losses)/income
Items that may be reclassified subsequently to profit or loss:
Currency translation differences	(18,978)	44,962
Share of currency translation differences of
joint ventures	(8,360)	7,651
Share of currency translation differences of associates	(2)	-
Share of cash flow hedges of an associate, net of tax	-	(855)
Fair value gains on available-for-sale financial assets, net	-	15,703
Items that will not be reclassified to profit or loss:
Fair value losses on financial assets at fair value through other
comprehensive income, net	(17,873)	-
Other comprehensive (losses)/income for the period	(45,213)	67,461
Total comprehensive income for the period	143,230	275,005
Total comprehensive income attributable to:
Equity holders of the Company	141,513	263,546
Non-controlling interests	1,717	11,459
143,230	275,005

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 30th June 2018

Unaudited	Audited
30th June	31st December
2018	2017
Note	HK$'000	HK$'000
ASSETS
Non-current assets
Intangible assets	104,031	104,287
Property, plant and equipment	318,451	331,038
Prepaid premium for land leases	30,932	31,549
Investment properties	97,630	97,468
Investments in joint ventures	282,193	298,190
Investments in associates	128,092	122,644
Financial assets at fair value through
other comprehensive income	82,450	-
Available-for-sale financial assets	-	60,613
Deferred income tax assets	50,870	54,156
Non-current deposits	11	-	1,563
1,094,649	1,101,508
Current assets
Inventories	378,853	450,923
Trade and other receivables	12	1,705,956	1,528,869
Available-for-sale financial assets	-	38,848
Financial assets at fair value through profit or loss	-	862
Current income tax recoverable	3,139	4,283
Restricted bank deposits	1,779	1,794
Current deposits and cash and cash equivalents	6,382,499	6,483,613
8,472,226	8,509,192
Total assets	9,566,875	9,610,700
EQUITY
Capital and reserves attributable to the
Company's equity holders
Share capital	153,296	153,296
Reserves	7,718,391	7,760,833
7,871,687	7,914,129
Non-controlling interests	301,188	299,471
Total equity	8,172,875	8,213,600
LIABILITIES
Non-current liability
Deferred income tax liabilities	65,669	64,829
Current liabilities
Trade payables, contract liabilities and other payables	13	1,221,076	1,311,362
Current income tax liabilities	24,228	20,909
Short-term borrowings	83,027	-
1,328,331	1,332,271
Total liabilities	1,394,000	1,397,100
Total equity and liabilities	9,566,875	9,610,700

NOTES:

• 1 GENERAL INFORMATION

  COSCO SHIPPING International (Hong Kong) Co., Ltd. (the''Company'') and its subsidiaries (together, the''Group'') are principally engaged in the provision of shipping services and general trading.

  The Company is a limited liability company incorporated in Bermuda and its shares are listed on The Stock Exchange of Hong Kong Limited. The address of its principal place of business is 47th Floor, COSCO Tower, 183 Queen's Road Central, Hong Kong.

  The ultimate holding company of the Company is China COSCO Shipping Corporation Limited (''COSCO SHIPPING''), a state-owned enterprise established in the People's Republic of China (the''PRC'').

  This unaudited condensed consolidated interim financial information for the six months ended 30th June 2018 (the''Unaudited Condensed Consolidated Interim Financial Information'') is presented in Hong Kong dollars, unless otherwise stated.

  This Unaudited Condensed Consolidated Interim Financial Information was approved by the board of directors for issue on 24th August 2018.

• 2 BASIS OF PREPARATION AND ACCOUNTING POLICIES

  This Unaudited Condensed Consolidated Interim Financial Information has been prepared in accordance with Hong Kong Accounting Standard 34''Interim Financial Reporting''issued by the Hong Kong Institute of Certified Public Accountants (the''HKICPA'') and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

  This Unaudited Condensed Consolidated Interim Financial Information should be read in conjunction with the annual financial statements for the year ended 31st December 2017, which were prepared in accordance with Hong Kong Financial Reporting Standards (''HKFRSs'') issued by the HKICPA.

  The accounting policies and methods used in the preparation of the Unaudited Condensed Consolidated Interim Financial Information are consistent with those set out in the annual financial statements for the year ended 31st December 2017 except that the Group has adopted the following new accounting standards issued by the HKICPA, which are relevant to its operations and are effective for accounting periods beginning on or after 1st January 2018.

Effective for accounting periods beginning on or after

HKFRS 15	Revenue from contracts with customers	1st January 2018
HKFRS 9	Financial instruments	1st January 2018

The impact of the adoption of these standards are disclosed in note 3. The adoption of other amendments and new interpretation did not result in any substantial changes to the Group's accounting policies and had no material financial impact on the consolidated interim financial information.