COSCO SHIPPING Energy Transportation (1138) H1 2024 earnings summary

Executive summary

• Operates the world's largest oil tanker fleet with 154 oil tankers and a leading position in China's LNG shipping market, investing in 85 LNG carriers, 45 of which are operational as of June 2024.

• Focuses on international and domestic oil shipping and international LNG shipping, with LNG fleet growth tied to long-term charters.

• Maintained stable business performance despite volatile geopolitical and oil trading environments, emphasizing customer diversification, digitalization, and risk control.

• Net profit attributable to shareholders was RMB 2,635 million in 1H 2024, down 9% year-over-year.

• Basic and diluted EPS were RMB0.5522 per share (RMB55.22 cents), down from RMB0.6068 per share in the prior year.

Financial highlights

• Revenue for Jan–Jun 2024 was RMB 11,572 million, up 1% year-over-year; cost of principal operations was RMB 7,800 million, up 4.5%.

• EBITDA for the period was RMB 5,712 million, a 7.6% decrease year-over-year.

• Gross profit margin decreased by 2.4 percentage points year-over-year to 32.6%.

• Net cash from operating activities was RMB 3,590 million, down 22% year-over-year.

• Final dividend of RMB0.35 per share for 2023 was approved; interim 2024 dividend decision postponed to October.

Outlook and guidance

• International oil shipping market expected to remain robust, with demand growth from China and India, but with increased freight rate volatility due to geopolitical factors.

• Domestic oil shipping faces continued pressure, but a short-term boost is expected in Q3; LNG shipping market to benefit from Asian demand and new long-term contracts.

• LNG shipping market projected to grow 3.9% in 2024, with a positive medium- to long-term outlook due to new liquefaction capacity.

• The Group will focus on optimizing global capacity, digital transformation, cost control, and safety management in H2 2024.

• Asia Pacific expected to drive future oil demand growth, with incremental supply from the Atlantic region increasing tonne-mile demand.