Cosco Shipping Ports Limited · HKEX:1199
Cosco Shipping Ports — H1 2020 Earnings Presentation
34 slides from Cosco Shipping Ports's earnings presentation, Aug 27, 2020
Slide 1: 1H2020 Results Presentation
1H2020 Results Presentation With strong financial position and captive demand, we are confident of standing out on the ride of August 27, 2020 recovery momentum
Slide 2: Agenda
Agenda 1 Sustainability & Recovery 2 Financial Highlights 3 Operational Review 4 Outlook 5 Appendix
Slide 3: Agenda
Agenda 1 Sustainability & Recovery 2 Financial Highlights 3 Operational Review 4 Outlook 5 Appendix
Slide 4: Strong Cash Flow to Maintain Dividend Policy
Strong Cash Flow to Maintain Dividend Policy Increasing cash flow during 1H2020 • Our total cash reached USD$1,088M at the end of June 2020, an increase of 17% comparing to the end of FY2019 due to operating cash inflow, cash received from disposal of interest in Yangzhou and Zhangjiagang terminals,
Slide 5: Sustainable Dividend Yield and Long-term Investment Value
Sustainable Dividend Yield and Long-term Investment Value Dividend yield (2) 1199 Peers Average • Amid economic uncertainties, some 8.4% other companies have 7.8% cut or even cancelled 7.7% their dividend; however, 6.5% we expect to maintain 5.9% 6.0% our dividend policy 6.2% • Our dividend yield ha
Slide 6: Improving Profitability in terminals of Greater China Region
Improving Profitability in terminals of Greater China Region • Although overall subsidiaries’ EBITDA decreased by 15.9% YoY in 2Q 2020, demand in Greater China's subsidiaries in June recovered as their EBITDA for the month reached USD$21.1 M, up 11.1% MoM and slightly down 0.7% YoY, the highest leve
Slide 7: Agenda
Agenda 1 Sustainability & Recovery 2 Financial Highlights 3 Operational Review 4 Outlook 5 Appendix
Slide 8: Financial Highlights – 1H2020 Interim Dividend Increased by 8.8% YoY
Financial Highlights – 1H2020 Interim Dividend Increased by 8.8% YoY Adjusted (Excluding disposal of Nanjing Reported Longtan, Zhangjiagang, Yangzhou and (US$ million, unless stated otherwise) Yangtze Petrochemical terminals) 1H2020 1H2019 YoY Change 1H2020 1H2019 YoY Change Revenue 452.7 517.9 -12.
Slide 9: Revenue & Costs – 1H2020 Revenue Decreased in Greater China Region
Revenue & Costs (1) – 1H2020 Revenue Decreased in Greater China Region Due To COVID-19 Revenue (US$ million) Costs of Sales (US$ million) 3.0% + 1.1% 492.6 349.5 353.5 2.5% 452.7 3.0% 1.6% 2.3% 5.4% 3.0% CSP Abu Dhabi 3.0% 3.2% 3.0% 3.6% 29.5% 3.0% Nantong 34.9% 26.8% 30.6% CSP Zeebrugge 16.5% CSP S
Slide 10: Terminals Profit – Overseas Terminals Profit Impacted by Depreciation Cost and COVID-19
Terminals Profit (1) – Overseas Terminals Profit Impacted by Depreciation Cost and COVID-19 • Greater China's terminals profit accounted for higher percentage of total terminals profit in 1H2020, benefiting from the profitability improvement in June and containment for COVID-19 in China Top 10 Termi
Slide 11: Financial Position – Healthy Balance Sheet with Strong Cash Position
Financial Position – Healthy Balance Sheet with Strong Cash Position We are more prudent to the cash management amid challenging and uncertain environment in 2020 • Cash of USD$1,088M at the end of June 2020, up 17% comparing to end of FY19 • Net gearing ratio of 29.0% at the end of June 2020, which
Slide 12: Agenda
Agenda 1 Sustainability & Recovery 2 Financial Highlights 3 Operational Review 4 Outlook 5 Appendix
Slide 13: Operational Results – Overseas Region Contributed 1/3 to Equity Throughput
Operational Results (1) – Overseas Region Contributed 1/3 to Our Total Equity Throughput Total Throughput ('000 TEU) 1H2019 1H2020 YoY Equity Throughput ('000 TEU) 1H2019 1H2020 YoY Total throughput 57,696 57,554 -0.2% Equity throughput 18,803 18,035 -4.1% - Subsidiaries 11,873 10,422 -12.2% - Subsi
Slide 14: Worldwide M&A Opportunities
Worldwide M&A Opportunites Terminals Annual Designed Capacity (TEU) PCT 6,200,000 CSP Spain Group 5,100,000 Antwerp 3,700,000 Euromax 3,200,000 Kumport 2,100,000 Vado Reefer 250,000 CSP Zeebrugge 1,300,000 Suez Canal 5,000,000 COSCO-PSA 4,850,000 CSP Abu Dhabi 2,500,000 • Strategically pursue invest
Slide 15: Increasing Overseas Exposure
Increasing Overseas Exposure Equity Throughput in '000 TEU (by geographic location) Asset Investments CAPEX: CAPEX: CAPEX: Investments – US$128m Investments – US$57m 19,347 Investments – US$147m PP&E – US$366m PP&E – US$86m 17,967 18,077 PP&E – US$487m Examples: Examples: 32.0% Example: • COSCO-PSA
Slide 16: Secured Demand with Shipping Alliances
Secured Demand with Shipping Alliances (1) Throughput from COSCO SHIPPING Lines, OOCL, Evergreen + Growth in Throughput (2) CMA, 2M+THE Alliance and others as % of total throughput (2) (1H2019 vs 1H2020) COSCO SHIPPING Lines OOCL Evergreen + CMA OCEAN Alliance 2M + THE Alliance Others -5.6% COSCO SH
Slide 17: Increasing Equity Throughput from Subsidiaries
Increasing Equity Throughput from Subsidiaries With more control, we could provide more value- Equity Throughput in '000 TEU (in terms of terminals) added services in our terminals, such as: • Developing High-end warehouses and logistics parks 19,347 18,077 17,967 • Promoting technology and innovati
Slide 18: Company Updates – Value-Added Services and Technology Development
Company Updates – Value-Added Services and Technology Development Total Area Warehouse Capex Commencement (sqm) Area (sqm) (Million) date CSP Abu Dhabi CFS 273,970 105,225 138mUSD October 2020 Further enhance shipping and CSP Verbrugge CFS 77,869 41,580 13mEUR Now operating logistics operation capab
Slide 19: Assets Divestment for Capital Recycling
Assets Divestment for Capital Recycling The disposal of the interest in Yangzhou The after-tax gain for disposal of It is expected that we will sell its Yuanyang Terminal and Zhangjiagang interest in Jiangsu Yangtze interest in Taicang Terminal in Terminal was completed on 10 Feb 2020. The Petrochem
Slide 20: Agenda
Agenda 1 Sustainability & Recovery 2 Financial Highlights 3 Operational Review 4 Outlook 5 Appendix
Slide 21: Lean Operations – Cost Reduction
Lean Operations – Cost Reduction Cost Reduction ➢ Establish the cost management system which focuses on financial management and control and bases on “cost per TEU” to place great emphasis on the importance of ports operation and management. Introduce “cost per TEU” in the KPI to formulate operation
Slide 22: Lean Operations – Revenue Growth and Headquarters' Empowerment
Lean Operations – Revenue Growth and Headquarters’ Empowerment ➢ Build customer value analysis model to mainly analyze the profit contribution from different shipping companies and different boxes to understand the profit comes from which customer and business. Headquarters and terminals can precise
Slide 23: 2H2020 Throughput Outlook
2H2020 Throughput Outlook Challenges Opportunities ⚫ Some overseas terminals are still affected by ⚫ A rebound in throughput of exsiting China's COVID-19 terminals since April as we have been always ready to grasp opportunities ⚫ Sino-US trade disputes ⚫ Low interest-rates environment promotes consu
Slide 24: Q&A Thank you!
cosc Smee © tsse SOAR “S<~“" _ COSCO SHIPPING Ports Limited ec Thank you! 4
Slide 25: Agenda
Agenda 1 Sustainability & Recovery 2 Financial Highlights 3 Operational Review 4 Outlook 5 Appendix
Slide 26: Upgrading with Professionalism for Quality Enhancement
Upgrading with Professionalism for Quality Enhancement Upgrading with Quality Professionalism Enhancement 1. Senior management team > an average of 20 years of 1. Strong capability and professionalism, e.g. PCT and experiences in shipping and port industry Xiamen 2. Effective strategies: Globalizati
Slide 27: On Track to Achieve Our 5-Year Target
On Track to Achieve Our 5-Year Target 2016 2019 2021 Restructuring Where we were Vision ◆ As a pure port operator ◆ No. of subsidiaries increased Operations: to 16 (FY2016: 10) ◆ Global terminal network ◆ 3 core strategies ◆ Industry leader in terms of ◆ Linkage effects in costs, total container thr
Slide 28: Return On Equity (ROE) Improvement – Newly Acquired Terminals to Catch Up
Return On Equity (ROE) Improvement – Newly Acquired Terminals to Catch Up 6.5 (3) ROE 6.3 (%) 4.8 (2) 3.5 (1) FY2016 FY2017 FY2018 FY2019 Note: (1) Excluding one-off gain of FCHL transaction of US$59.0 m and three months of share profits of FCHL of US$7.1 m (2) Excluding one-off gain of QPI transact
Slide 29: Incentive Scheme – Aligning Shareholders' Interests
Incentive Scheme – Aligning Shareholders’ Interests ◼ A total of about 53 million share options were granted to around 238 eligible employees under the share option scheme on 19 June 2018. ◼ Exercising criteria are in line with shareholders’ interests. Batch No. of Percentage of Return on Growth Rat
Slide 30: Sustainability Framework
Sustainability Framework ◆ Providing a healthy and safe working environment ◆ Building an inclusive, diversified and sustainable workforce ◆ Transitioning to “Green Ports” ◆ Ensuring operational compliance ◆ Managing energy consumptions and ◆ Promoting inclusive development emission to respond to cl
Slide 31: Aligning Global Principles
Aligning Global Principles We support the Sustainable Development Goals (SDGs) of the United Nations and identify how these global sustainability challenges relate to our business and integrate them into our daily operations: Global Recognition and Advocacy: 31
Slide 32: Greater China Portfolio (As of the end of June 2020)
Greater China Portfolio (As of the end of June 2020) Region Annual Designed Capacity (TEU) Bohai Rim 31,450,000 Yangtze River Delta 15,520,000 S.E. Coast & others 9,000,000 Pearl River Delta 25,600,000 S.W. Coast 12,000,000 Total 93,570,000 32
Slide 33: Disclaimer
Disclaimer This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of COSCO SHIPPING Ports Limited (“COSCO SHIPPING Ports”) and certain plans and prospects of the management of COSCO SHIPPING Ports. Such forward-lookin
Slide 34: Thank you!
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