Cosco Shipping Ports Limited · HKEX:1199
Cosco Shipping Ports — H1 2019 Earnings Presentation
32 slides from Cosco Shipping Ports's earnings presentation, Aug 29, 2019
Slide 1: 1H2019 Results: Gearing Up for Growth
1H2019 Results Gearing Up for Growth 29 August 2019
Slide 2: Agenda
Agenda 1 Financial Highlights 2 Operational Review 3 Strategies 4 Appendix
Slide 3: Agenda
Agenda 1 Financial Highlights 2 Operational Review 3 Strategies 4 Appendix
Slide 4: Financial Highlights – Sound Fundamentals amid External Turbulence
Financial Highlights – Sound Fundamentals amid External Turbulence (US$ million, unless stated otherwise) 1H2019 1H2018 YoY Change Revenue 517.9 495.5 +4.5% Cost of sales 364.5 338.0 +7.9% Gross profit 153.4 157.5 -2.6% Share of profits from Joint Ventures & Associates 144.6 151.9 -4.8% EBITDA 338.9
Slide 5: Terminal Profits – Diversified Exposure
Terminal Profits – Diversified Exposure Terminal Profits by Regions (US$ million) Top 10 Terminal Contributors 1H2019 1H2018 QPI 24.7% QPI 27.1% $203.5 Yantian 11.6% Yantian 11.9% $195.4 Beibu Gulf 10.1% PCT 7.0% PCT 7.5% Shanghai Pudong 5.8% Overseas Kumport 5.3% Kumport 5.6% 16.4% 16.6% Shanghai P
Slide 6: Financial Position – Healthy Balance Sheet and Low Borrowing Cost
Financial Position – Healthy Balance Sheet and Low Borrowing Cost (US million, unless stated otherwise) As at 30 June 2019 As at 30 June 2018 Total assets 10,030 9,014 Net asset 5,727 5,881 Total debt 2,510 2,307 Cash on hand (including restricted cash) 631 579 Net debt to equity (excluding lease li
Slide 7: Agenda
Agenda 1 Financial Highlights 2 Operational Review 3 Strategies 4 Appendix
Slide 8: Operational – Increasing Contribution from Subsidiaries & Balanced Portfolio
Operational – Increasing Contribution from Subsidiaries & Balanced Portfolio Total Throughput (TEU) 1H2019 1H2018 YoY Change Equity Throughput by Regions (TEU) Total throughput 59,764,100 56,708,750 +5.4% - Subsidiaries 12,445,333 10,863,570 +14.6% 19,347,303 - Non-subsidiaries 47,318,767 45,845,180
Slide 9: Agenda
Agenda 1 Financial Highlights 2 Operational Review 3 Strategies 4 Appendix
Slide 10: Effective Growth Strategies
Effective Growth Strategies Globalisation • Building a global terminal network with controlling stake M&A Equity throughput from overseas Globalisation 20.2% (1H16) 32.0% (1H19) Synergy Control • Leveraging the synergies with Shipping Alliances Existing terminals 3 Core Total throughput from Shippin
Slide 11: Globalisation – Growing Good Quality Asset Base
Globalisation – Growing Good Quality Asset Base Asset Investments Equity Throughput (in terms of geographic locations) CAPEX: CAPEX: Investments – US$128m 1H2016 1H2019 Investments – US$147m PP&E – US$366m Equity Throughput Equity Throughput PP&E – US$487m Examples: Example: • COSCO-PSA (one new ber
Slide 12: Synergy – Strong Linkage Effects with Shipping Alliances
Synergy – Strong Linkage Effects with Shipping Alliances Throughput from COSCO SHIPPING, OOCL, Evergreen + CMA, Growth in Volume Contributions 2M+THE Alliance and others as % of total throughput (1) (1H2018 vs 1H2019) COSCO SHIPPING OOCL Evergreen + CMA OCEAN Alliance 2M + THE Alliance Others +9.8%
Slide 13: Control – Increasing Contributions from Subsidiaries
Control – Increasing Contributions from Subsidiaries Equity Throughput (in terms of terminals) 1H2016 1H2019 Equity Throughput Equity Throughput 14,347,074 TEU 19,347,303 TEU 10 Subsidiaries 16 Subsidiaries Subsidiaries 40.8% Subsidiaries 34.8% 1H2016 1H2019 Non-subsidiaries 65.2% Non-subsidiaries 5
Slide 14: Control – Efficiency Improvement and Cost Reduction by Adopting Technology
Control – Efficiency Improvement and Cost Reduction by Adopting Technology CSP Zeebrugge Terminal Lianyungang New Oriental Full transition to Navis N4 in launched Navis N4 system in International Terminal will all subsidiaries in the coming July 2019. launch Navis N4 system to 3-4 years. further str
Slide 15: On Track to Achieve Our 5-Year Target
On Track to Achieve Our 5-Year Target 2016 2018 2021 Restructuring Where we were Vision ◆ As a pure port operator ◆ No. of subsidiaries increased Operations: to 15 (FY2016: 10) ◆ Global terminal network ◆ 3 core strategies ◆ Industry leader in terms of ◆ Linkage effects in costs, total container thr
Slide 16: Gearing Up for Growth
Gearing Up for Growth (US$ million) Recent greenfield projects having growth potential 169.0 15.4 161.0 147.8 (6.0) (22.6) yoy yoy -12.5% -4.7% 1H2018 1H2019 One-off loss of Loss of Fair value gain of 1H2019 Vision Net profit Net profit share dilution effect HKFRS 16 Beibu Gulf Adjusted net profit a
Slide 17: Achievement on Strategy Implementation – 5-Year Plan on Track
Achievement on Strategy Implementation – 5-Year Plan on Track ROE 6.3 (%) 4.8 (2) (3) ROE 3.25 3.38 3.5 (1) (%) (1) (2) 2.06 2.13 1H16 1H17 1H18 1H19 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
Slide 18: 2019 Full-year Outlook
2019 Full-year Outlook We Expect FY2019 Equity Throughput High single-digit growth(1) Equity Throughput (TEU) Challenge Opportunities +7.7% Depreciation of RMB Sino-US trade dispute Low interest rate environment 1H2018 1H2019 Cautiously Optimistic Note: (1) Excluding throughput from QPI 18
Slide 19: Potential Drivers or Catalysts
Potential Drivers or Catalysts Organic throughput growth upside on the back of OCEAN 1 Alliance and contribution from newly acquired ports Growth potential arising from diversification into 2 value-added ports related business 3 Possible value accretive acquisitions and potential divestment of non-s
Slide 20: 2019 Market Challenges and Our Responses
2019 Market Challenges and Our Responses Limited Exposure– Subsidiaries: throughput from US trade lines accounts for around single-digit Sino-US Trade percentage of total throughput Tension Cautious Optimism – As a leading port operator with a unique advantage of linkage effects with parent company,
Slide 21: Q&A Thank you!
cosco supemc Pia OARAAl - COSCO SHIPPING Ports Limited the Pere oe Q&A Thank you!
Slide 22: Agenda
Agenda 1 Financial Highlights 2 Operational Review 3 Strategies 4 Appendix
Slide 23: COSCO SHIPPING Ports Today
COSCO SHIPPING Ports Today 1 China COSCO SHIPPING Corporation Integrated Limited Shipping As of 30 June 2019 Capacity Designed Capacity 122 mn TEU Ports 37 Terminals 49 Designed Berths 308 Designed Container Berths 211 1 COSCO SHIPPING Ports Total Limited Throughput 23 Source: 2019 Drewry Report
Slide 24: Strong Synergy with Parent Company & the OCEAN Alliance
Strong Synergy with Parent Company & the OCEAN Alliance COSCO SHIPPING Lines + OOCL 332 ports of call 37 ports invested and operated 12.6% market share (1) 5.9% equity throughput (2) Notes: (1) Alphaliner TOP 100 (as of 30 Jun 2019) Diversified customer base and cross-alliance (2) 2019 Drewry Report
Slide 25: Integrated Business Model
Integrated Business Model Sustainable business model Internal and external synergies Internal collaboration Integrated operating system Global coordination and marketing Localised operations Global terminal network Global and unified operations Enhanced customer experience Replicable and standardise
Slide 26: Proficient Leadership and Strong Teamwork
Proficient Leadership and Strong Teamwork Parallel management system Career advancement Appraisal mechanism Cultural integration Staff development ◆ Internationalisation External recruitment ◆ Professionalisation ◆ from the market ◆ Localisation ◆ from the Group 43% 45% Senior management Foreign sen
Slide 27: 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 28: Financial Highlights After Restructuring
Financial Highlights After Restructuring Revenue EBITDA (exclude one-off item) NP attributable to equity holders (exclude one-off item) (US$’mn) 600 518 495 505 400 359 340 281 313 339 275 276 263 215 178 211 (2) 169 156 169 (3) 200 106 (1) 99 (2) 128 75 0 1H 2016 2H 2016 1H 2017 2H 2017 1H 2018 2H
Slide 29: Greater China Portfolio
Greater China Portfolio Region Annual Designed Capacity (TEU) Bohai Rim 26,600,000 Yangtze River Delta 20,320,000 S.E. Coast & others 7,400,000 Pearl River Delta 25,600,000 S.W. Coast 1,200,000 Total 81,120,000 29
Slide 30: Overseas Portfolio
Overseas Portfolio Terminal Annual Designed Shareholding Capacity (TEU) Piraeus 6,200,000 100% CSP Spain Group 5,100,000 51% Antwerp 3,500,000 20% Euromax 3,200,000 35% Kumport 3,000,000 26% Vado 300,000 40% CSP Zeebrugge 1,000,000 85% Suez Canal 5,100,000 20% COSCO-PSA 5,000,000 49% CSP Abu Dhabi 2
Slide 31: 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 32: Thank you!
cosco supemc =P EB OARAA A S<“" COSCO SHIPPING Ports Limited q~ The Ports for ALL 9 Thank you!