Cosco Shipping Intrntl Hongkong : 2017 Interim Results

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(Incorporated in Bermuda with limited liability)

(Stock Code: 00517)

2017 INTERIM RESULTS

RESULTS AND OPERATION HIGHLIGHTS

• Profit attributable to equity holders increased by 42% to HK$205,562,000 as compared to the same period of 2016. Such increase was mainly due to the increases in net exchange gains and net finance income.

• Revenue increased by 49% to HK$3,809,258,000 as compared to the same period of 2016 which was attributable to the increases in segment revenues of marine fuel and other products, marine equipment and spare parts, coatings as well as ship trading agency.

• Gross profit increased by 22% to HK$302,033,000 as compared to the same period of 2016. Gross profit margin decreased to 7.9% 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 increased by 17% to HK$169,737,000 as compared to the same period of 2016.

• Basic earnings per share was 13.41 HK cents, increased by 42% as compared to the same period of 2016.

• The Board has declared an interim dividend of 6 HK cents per share.

• The Group had net cash of HK$6,420,976,000 as at 30th June 2017 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 2017. 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 2017 (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 2017

Unaudited

Six months ended 30th June 2017 2016

Revenue	Note 3	HK$'000 3,809,258	HK$'000 2,555,427
Cost of sales	(3,507,225)	(2,308,052)
Gross profit	302,033	247,375
Other income and gains	4	66,765	14,626
Selling, administrative and general expenses	(232,956)	(185,212)
Other expenses and losses	5	(2,749)	(3,760)
Operating profit	6	133,093	73,029
Finance income	7	59,389	44,591
Finance costs	7	(3,311)	(2,124)
Finance income -net	7	56,078	42,467
Share of profits of joint ventures	35,126	48,652
Share of profits of associates	6,123	3,816
Profit before income tax	230,420	167,964
Income tax expenses	8	(22,876)	(18,817)
Profit for the period	207,544	149,147
Profit attributable to:
Equity holders of the Company	205,562	144,803
Non-controlling interests	1,982	4,344
207,544	149,147
Earnings per share attributable to equity holders of
the Company during the period
- basic, HK cents	9(a)	13.41	9.45
- diluted, HK cents	9(b)	13.41	9.45

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30th June 2017

Unaudited

Six months ended 30th June

2017 HK$'000	2016 HK$'000
Profit for the period	207,544	149,147
Other comprehensive income/(losses) Items that may be reclassified subsequently to profit or loss: Currency translation differences	44,962	(25,781)
Share of currency translation differences of a joint venture	7,651	(4,529)
Share of cash flow hedges of an associate, net of tax	(855)	6,002
Fair value gains on available-for-sale financial assets, net	15,703	1,397
Other comprehensive income/(losses) for the period	67,461	(22,911)
Total comprehensive income for the period	275,005	126,236
Total comprehensive income/(losses) attributable to: Equity holders of the Company	263,546	129,277
Non-controlling interests	11,459	(3,041)
275,005	126,236

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30th June 2017

Unaudited Audited30th June 31st December2017 2016

Note HK$'000HK$'000

ASSETS

Non-current assets

Intangible assets 103,764101,951

Property, plant and equipment 343,611343,912

Prepaid premium for land leases 30,72430,138

Investment properties 57,16456,954

Investments in joint ventures 358,708417,617

Investments in associates 123,714117,564

Available-for-sale financial assets 67,63363,091

Deferred income tax assets 58,33053,724

Non-current deposits1113, 0 8 3 11, 1 7 9

1 , 15 6,7 31 1,19 6,1 30

Current assets

Inventories 336,256243,360

Trade and other receivables 12 1,638,1101,196,797

Available-for-sale financial assets 44,54733,386

Derivative financial instruments -1,645

Financial assets at fair value through profit or loss 901886

Current income tax recoverable 3,2045,102

Restricted bank deposits 1,728559

Current deposits and cash and cash equivalents6 , 47 5,2 96 6,71 0,2 79

8,500,042 8,192,014

Total assets 9,656,773 9,388,144

EQUITY

Capital and reserves attributable to the Company's equity holders

Share capital 153,296153,296

Reserves7 , 65 1,4 51 7,54 8,8 65

7,804,747 7,702,161

Non-controlling interests 291,344 34 3,5 80

Total equity8 , 09 6,0 91 8,04 5,7 41

LIABILITIES

Non-current liability

Deferred income tax liabilities66, 6 0 2 69, 3 4 9

Current liabilities

Trade and other payables	13	1,392,803	1,186,822
Current income tax liabilities	32,146	19,156
Short-term borrowings	69, 1 3 1	67, 0 7 6
1,494,080	1,273,054
Total liabilities	1,560,682	1,342,403
Total equity and liabilities	9,656,773	9,388,144