COSCO SHIPPING Ports (1199) H1 2024 earnings summary

Executive summary

• Total throughput rose 8.2% year-on-year to 69.86 million TEU, with equity throughput up 6.3%, driven by strong performance in China and select overseas terminals, as well as expansion in emerging markets and operational efficiency improvements.

• Revenue increased 3.0% year-on-year to US$709.8 million, but profit attributable to equity holders declined 7.4% to US$139.2 million, mainly due to industry challenges and the Red Sea incident.

• Smart port and green transformation initiatives accelerated, including a 285% year-on-year increase in unmanned truck operations and full EAM system coverage at domestic terminals.

• Expansion in emerging markets continued, with major investments and ongoing construction at Chancay Port in Peru and Sokhna Port in Egypt.

• Enhanced supply chain solutions and logistics services, with significant growth in automotive, cross-border e-commerce, and clean energy sectors.

Financial highlights

• Gross profit increased 2.5% year-on-year to US$198.6 million, with gross margin at 28.0%.

• Net finance costs decreased by 2.4% year-on-year to US$67.7 million, despite higher average borrowing costs at 5.43%.

• Net debt-to-equity ratio remained low at 31.0% as of June 2024.

• Dividend payout ratio maintained at 40%, with an interim dividend of US1.560 cents per share.

• JVs & associates profits increased 1.1% year-on-year to US$155.4 million.

Outlook and guidance

• Global trade and throughput are expected to continue a positive trend in H2 2024, with China ports projected to grow around 10% for the year and global trade forecast to grow 2.6% in 2024 and 3.3% in 2025.

• CapEx for 2024 adjusted to US$890 million, with a focus on equity investment and fixed assets.

• Strategic focus on globalization, digitalization, green transformation, and expansion in emerging markets.

• Chancay Port in Peru expected to begin operations by year-end, supporting long-term profit growth.

• Continued emphasis on lean operations, technological innovation, and customer-centric strategies.