Cosco Shipping Ports Limited · HKEX:1199
Cosco Shipping Ports — Q3 2022 Earnings Presentation
35 slides from Cosco Shipping Ports's earnings presentation, Oct 27, 2022
Slide 1: 3Q 2022 Results Presentation
Bess COSCO SHIPPING Ports Limited ES! hee SRAA) The Ports for ALL 3Q 2022 Results Presentation — Accelerating Development by Improving Quality Achieving Results by Increasing Efficiency October 27, 2022
Slide 2: Agenda
Agenda 1 Key Highlights 2 Financial Performance 3 Operational Review 4 Strategy & Outlook 5 Q&A
Slide 3: Agenda
Agenda 1 Key Highlights 2 Financial Performance 3 Operational Review 4 Strategy & Outlook 5 Q&A
Slide 4: Strong Subsidiary Terminals' Profit Growth Momentum in 9M2022
Strong Subsidiary Terminals’ Profit Growth Momentum in 9M2022 ➢ Subsidiary terminals’ profit surged 42.0% YoY, mainly driven by successful lean operations management to boost revenue and reduce costs and contribution of TCT (1). ➢ We increased our stake in TCT from 16.01% to 51% in Dec 2021. Termina
Slide 5: Subsidiary Terminals' Profit Growth Momentum Remains Strong in 3Q2022
Subsidiary Terminals’ Profit Growth Momentum Remains Strong in 3Q2022 ➢ Subsidiary terminals’ profit in 3Q2022 rose 35.9% YoY, mainly driven by successful lean operations management to boost revenue and reduce costs, and contribution from TCT (1). ➢ Terminal profit contribution from TCT during 3Q202
Slide 6: Agenda
Agenda 1 Key Highlights 2 Financial Performance 3 Operational Review 4 Strategy & Outlook 5 Q&A
Slide 7: 9M2022 Financial Highlights
9M2022 Financial Highlights On a comparable basis, excluding Reported contribution from TCT which was not our (US$ million, unless stated otherwise) subsidiary terminal during 9M2021 9M2021 9M2022 YoY Change 9M2021 9M2022 YoY Change Consolidated throughput from Subsidiaries (in ’000 TEU) 17,282.2 24
Slide 8: 3Q2022 Financial Highlights – Margin Continued to Expand
3Q2022 Financial Highlights – Margin Continued to Expand On a comparable basis, excluding Reported contribution from TCT which was not our (US$ million, unless stated otherwise) subsidiary terminal during 3Q2021 3Q2021 3Q2022 YoY Change 3Q2021 3Q2022 YoY Change Consolidated throughput from Subsidiar
Slide 9: Gross Profit Grew by 32.0% YoY during 3Q2022
Gross Profit Grew by 32.0% YoY during 3Q2022 ➢ GPM in China region stayed at a relatively high level at 39.7%; GPM in overseas region increased 3.8 pps to 19.7% in 3Q2022. 3Q2022 Gross Profit (US$ million) 3Q2022 Revenue (US$ million) 102.3 Guangzhou Nansha 349.4 77.5 23.2 Xiamen Oceangate 295.8 48.
Slide 10: Continuous Enhancement of Subsidiary Terminals Contribution in 3Q2022
Continuous Enhancement of Subsidiary Terminals Contribution in 3Q2022 ➢ Terminal profit from subsidiaries rose 35.9% YoY to USD 27.2 M, contributing 25.3% of total in 3Q2022, compared to 17.9% in 3Q2021 3Q2022 Terminal Profit by Regions (US$ million) (1,2) Top 10 Terminal Contributors 3Q2021 3Q2022
Slide 11: Solid Financial Position to Support M&A and Dividend Payout
Solid Financial Position to Support M&A and Dividend Payout ➢ As of 30 September 2022, our cash and bank balance maintained strong at USD 1.25 billion ➢ Net gearing ratio remained at a healthy level of 26.9% ➢ Actual Capex in 3Q2022 was USD 105.2 million and in 9M2022 was USD 250.9 million Capex (US
Slide 12: Agenda
Agenda 1 Key Highlights 2 Financial Performance 3 Operational Review 4 Strategy & Outlook 5 Q&A
Slide 13: Throughput Contribution from Subsidiary Terminals Continued to Rise during 3Q2022
Throughput Contribution from Subsidiary Terminals Continued to Rise during 3Q2022 ➢ Proportion of equity throughput from subsidiary terminals increased from 36.6% to 45.7% in 3Q22 after TCT acquisition. 3Q2022 Total Throughput (’000 TEU) 3Q2022 Equity Throughput (’000 TEU) 11,105 33,721 34,203 10,32
Slide 14: Throughput Growth Supported by Ocean Alliance
Throughput Growth Supported by Ocean Alliance 3Q2022 Customers as A Percentage of Total Throughput (1) 9M2022 Customers as A Percentage of Total Throughput (1) COSCO SHIPPING Lines OOCL Evergreen + CMA COSCO SHIPPING Lines OOCL Evergreen + CMA OCEAN Alliance 2M + THE Alliance Others OCEAN Alliance 2
Slide 15: Accelerating Development of Value-Added Projects to Create New Sources of Growth
Accelerating Development of Value-Added Projects to Create New Sources of Growth Accelerate the ◼ Develop the supply chain business and accelerate the CSP Abu Dhabi CFS Phase 1 development of construction of the extended supply chain platform supply chain business to create ◼ Build up logistics netw
Slide 16: A Big Push for Technological Innovation at Subsidiary Terminals
A Big Push for Technological Innovation at Subsidiary Terminals to Facilitate Lean Operations ➢ Promote and implement the experience of 5G smart port construction at Wuhan Terminal. Expanding the 5G smart port demonstration area, deploying autonomous container truck system at Xiamen Terminal, extend
Slide 17: Agenda
Agenda 1 Key Highlights 2 Financial Performance 3 Operational Review 4 Strategy & Outlook 5 Q&A
Slide 18: Global Terminal Network and Lean Operations
Global Terminal Network and Lean Operations Capitalize on ◼ Identifying potential projects and tapping into the markets such as Southeast Asia, the global economic growth Middle East and Africa, particularly in strategic subsidiaries and highly-profitable non- optimize terminal portfolio subsidiarie
Slide 19: Lean Operations — Revenue Increase
Lean Operations — Revenue Increase Published price change of TEU in Chinese port authorities (1) ➢ Terminals maintain good relationships with shipping companies. Apart from maximizing synergy with parent company and OOCL, we also cooperate with different shipping companies to Original published pric
Slide 20: Pledge to Reach Carbon Neutrality at Subsidiary Level
Pledge to Reach Carbon Neutrality at Subsidiary Level Enhancing Energy Use Efficiency to Reduce Emissions and Combat Climate Change GHG Emissions Energy Consumption Long-term Commitment: Short-term Target: • To achieve carbon neutrality no later than 2060 • To reduce energy consumption intensity of
Slide 21: Enhancing Water and Waste Management at Subsidiary Level
Enhancing Water and Waste Management at Subsidiary Level Contributing to Ecological and Environmental Protection Water Consumption Waste Target: Target for Hazardous Waste: • To enhance the management of water resources • To maintain 100% hazard-free disposal of waste and improve water use efficienc
Slide 22: Outlook
Outlook Challenges Opportunities ➢ Resurgence of COVID-19 ➢ Long term opportunities for overseas terminals development as well as for domestic ports consolidation ➢ Surging Inflation and interest rate hike ➢ Good prospect on the back of our effective lean operations ➢ Increasing risks of geopolitica
Slide 23: Q & A Session
e oe e e e cosco SHIPPING Pe SESORRAA \S<~“" _ COSCO SHIPPING Ports Limited The Ports for ALL e Q &A Session A Se
Slide 24: Agenda
Agenda 1 Key Highlights 2 Financial Performance 3 Operational Review 4 Strategy & Outlook 5 Q&A 6 Appendix
Slide 25: Solid Revenue and Gross Profit Growth for 9M2022
Solid Revenue and Gross Profit Growth for 9M2022 ➢ Solid revenue and gross profit growth during 9M2022 was mainly driven by our successful sales and marketing strategy to raise ASP in our global subsidiary terminals, as well as the acquisition of TCT 9M2022 Revenue (US$ million) 9M2022 Gross Profit
Slide 26: Continuous Profitability Enhancement for Subsidiary Terminals during 9M2022
Continuous Profitability Enhancement for Subsidiary Terminals during 9M2022 ➢ Terminal profit from subsidiaries rose 42.0% YoY to USD 85.5 M, contributing 26.2% of total in 9M2022, compared to 18.3% in 9M2021 9M2022 Terminal Profit by Regions (US$ million) (1,2) Top 10 Terminal Contributors 326.2 9M
Slide 27: Equity Throughput from Subsidiary Terminals Continued to Grow during 9M2022
Equity Throughput from Subsidiary Terminals Continued to Grow during 9M2022 ➢ 9M2022 equity throughput increased 6.1% YoY. The main contributor was the Bohai Rim region 9M2022 Total Throughput (’000 TEU) 9M2022 Equity Throughput (’000 TEU) 29,785 31,599 96,431 97,414 Bohai Rim 24.0% 28.5% 34.0% 33.0
Slide 28: Lean Operations — Cost Control
Lean Operations — Cost Control Four measures to improve lean operations A series of cost control measures and cost control capabilities Innovatively set up ports operations management COE Actively promote and enhance automation in the Team terminal to improve efficiency and lower outsourcing cost Es
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 Rate
Slide 30: SDGs of our Major Concern
SDGs of our Major Concern We align our major initiatives with the Sustainable Development Goals (SDGs) of the United Nations. By identifying five goals as the most important and most relevant to our operations, we have integrated them into five key areas of sustainable development. SDG 4 Quality Edu
Slide 31: Our Sustainability Approaches
Our Sustainability Approaches Approach 1: Caring for Our People Providing a healthy, safe, inclusive and diverse work environment to attract and cultivate talents for our sustained growth Approach 2: Customers First Investing in building “green ports”, minimising the environmental impacts of our ope
Slide 32: Sustaining High Standard of Governance
Sustaining High Standard of Governance Balanced and Diverse Board Composition ESG Committee in Place ✓ High level of independent representation on the ✓ Led by an Independent Non-executive Director, Board and comprised the Chairman of the Company and another Independent Non-executive ✓ Diversified s
Slide 33: Key and Ongoing Initiatives under our Sustainability Approaches
Key and Ongoing Initiatives under our Sustainability Approaches Approach 1 Approach 2 Approach 3 Approach 4 Approach 5 Caring for Our People Customers First Green Development Win-win Cooperation Investing in Communities 1. Elevating diversity and 1. Building 5G smart ports to deliver more reliable a
Slide 34: 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 35: Thank you!
®BZBOBRAA (O SHIPPING Ports Limit IPPING ig COSC: Thank you! __ 4