Cosco Shipping Ports Limited · HKEX:1199
Cosco Shipping Ports — Q3 2019 Earnings Presentation
30 slides from Cosco Shipping Ports's earnings presentation, Oct 29, 2019
Slide 1: 3Q2019 Results: Strengthening Global Footprint
3Q2019 Results Strengthening Global Footprint 29 October 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: 3Q2019 Financial Highlights – Sound Fundamentals amid External Turbulence
3Q2019 Financial Highlights – Sound Fundamentals amid External Turbulence (US$ million, unless stated otherwise) 3Q2019 3Q2018 YoY Change Revenue 254.7 253.0 +0.7% Cost of sales 188.1 177.2 +6.1% Gross profit 66.6 75.8 -12.1% Share of profits from Joint Ventures & Associates 71.3 69.4 +2.7% EBITDA 1
Slide 5: 9-month Financial Highlights – Sound Fundamentals amid External Turbulence
9-month Financial Highlights – Sound Fundamentals amid External Turbulence 9 months 9 months (US$ million, unless stated otherwise) YoY Change 2019 2018 Revenue 772.6 748.4 +3.2% Cost of sales 552.6 515.2 +7.3% Gross profit 220.0 233.2 -5.7% Share of profits from Joint Ventures & Associates 215.9 22
Slide 6: 3Q2019 Breakdown of Revenue & Costs of Sales
3Q2019 Breakdown of Revenue & Costs of Sales Revenue Costs of Sales 188.1 254.7 253.0 177.2 10.2% 15.2% Guangzhou Nansha 12.3% 16.4% 8.0% 3.3% Xiamen Oceangate 6.5% 8.1% 9.8% 4.6% 2.3% 1.9% Zeebrugge CSP Spain 30.9% 27.0% 32.0% 28.9% PCT Other subsidiaries 24.1% 26.0% 26.9% 27.3% 20.6% 19.7% 17.7% 2
Slide 7: 3Q2019 Terminal Profits – Diversified Exposure
3Q2019 Terminal Profits – Diversified Exposure Terminal Profits by Regions (US$ million) Top 10 Terminal Contributors 3Q2019 3Q2018 $91.8 $81.9 QPI 30.0% QPI 20.9% Yantian 19.6% Yantian 17.2% Overseas PCT 8.5% PCT 7.6% 20.9% 10.4% -0.6% Shanghai Pudong 6.6% Kumport 6.1% S.W. Coast 1.2% Guangzhou Nan
Slide 8: Financial Position – Healthy Balance Sheet and Low Borrowing Cost
Financial Position – Healthy Balance Sheet and Low Borrowing Cost As at 30 September As at 30 September (US million, unless stated otherwise) 2019 2018 Total assets 10,369 8,900 Net asset 5,616 5,726 Total debt 2,928 2,368 Cash on hand (including restricted cash) 1,181 678 Net debt to equity 31.1% 2
Slide 9: Agenda
Agenda 1 Financial Highlights 2 Operational Review 3 Strategies 4 Appendix
Slide 10: 3Q2019 Operational – Increasing Contribution from Subsidiaries & Balanced Portfolio
3Q2019 Operational – Increasing Contribution from Subsidiaries & Balanced Portfolio Total Throughput (TEU) 3Q2019 3Q2018 YoY Change Total Throughput by Regions (TEU) Total throughput 32,405,006 30,792,548 +5.2% 32,405,006 - Subsidiaries 6,565,154 5,806,549 +13.1% 30,792,548 - Non-subsidiaries 25,839
Slide 11: Agenda
Agenda 1 Financial Highlights 2 Operational Review 3 Strategies 4 Appendix
Slide 12: Effective Growth Strategies
Effective Growth Strategies Globalisation • Building a global terminal network with controlling stake M&A Equity throughput from overseas Globalisation 20.9% (3Q16) 31.9% (3Q19) Synergy Control • Leveraging the synergies with Shipping Alliances Existing terminals 3 Core Total throughput from Shippin
Slide 13: 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 3Q2016 3Q2019 Investments – US$147m PP&E – US$366m Equity Throughput Equity Throughput PP&E – US$487m Examples: Example: • COSCO-PSA (one new ber
Slide 14: 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 (1) 2M+THE Alliance and others as % of total throughput (1) (3Q2018 vs 3Q2019) COSCO SHIPPING OOCL Evergreen + CMA OCEAN Alliance 2M + THE Alliance Others +1
Slide 15: Control – Increasing Contributions from Subsidiaries
Control – Increasing Contributions from Subsidiaries Equity Throughput (in terms of terminals) 3Q2016 3Q2019 Equity Throughput Equity Throughput 7,469,053 TEU 10,344,892 TEU 10 Subsidiaries 16 Subsidiaries Subsidiaries 40.7% Subsidiaries 33.8% 3Q2016 3Q2019 Non-subsidiaries 66.2% Non-subsidiaries 59
Slide 16: 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 17: Assets Divestment for Capital Recycling
Assets Divestment for Capital Recycling Strategic plan to dispose The Company announced disposal of interests Nanjing Longtan interests in terminals which Terminal, Yangzhou Yuanyang Terminal and Zhangjiagang Terminal. have comparatively small The total annual contribution profit of the interest in
Slide 18: 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 (2) 4.76 4.84 3.5 (1) (%) (1) 3.54 2.92 1Q-3Q16 1Q-3Q17 1Q-3Q18 1Q-3Q19 FY2016 FY2017 FY2018 FY2019 Note: (1) Excluding one-off gain of FCHL transaction of US$59.0 m and three months of share profits of FCHL of
Slide 19: 2019 Full-year Outlook
2019 Full-year Outlook We Expect FY2019 Equity Throughput High single-digit growth(1) 1Q-3Q2019 Equity Throughput (TEU) (1) Challenge Opportunities +8.0% Depreciation of RMB Sino-US trade dispute Low interest rate environment 1Q-3Q2018 1Q-3Q2019 Cautiously Optimistic Note: (1) Excluding throughput f
Slide 20: Sustainability Framework
Sustainability Framework ◆ Providing a healthy and safe working environment ◆ Building an inclusive, diversified and sustainable workforce ◆ Transitioning to “Green Ports” ◆ Ensuring operational compliance ◆ Managing energy consumptions and ◆ Promoting inclusive development emission to respond to cl
Slide 21: Aligning Global Principles
Aligning Global Principles We support the Sustainable Development Goals (SDGs) of the United Nations and identify how these global sustainability challenges relate to our business and integrate them into our daily operations: Local and Global Recognition and Advocacy: 21
Slide 22: Q&A Thank you!
cosco supemc Pia OARAAl - COSCO SHIPPING Ports Limited the Pere oe Q&A Thank you!
Slide 23: Agenda
Agenda 1 Financial Highlights 2 Operational Review 3 Strategies 4 Appendix
Slide 24: On Track to Achieve Our 5-Year Target
On Track to Achieve Our 5-Year Target 2016 2018 2021 Restructuring Where we were Vision ◆ As a pure port operator ◆ No. of subsidiaries increased Operations: to 15 (FY2016: 10) ◆ Global terminal network ◆ 3 core strategies ◆ Industry leader in terms of ◆ Linkage effects in costs, total container thr
Slide 25: Gearing Up for Growth
Gearing Up for Growth (US$ million) Recent greenfield projects having growth potential 244.1 13.2 244.1 219.6 (15.1) (22.6) yoy yoy -10.0% +0.0% 1Q-3Q2018 1Q-3Q2019 One-off loss of Loss of Fair value gain of 1Q-3Q2019 Vision Net profit Net profit share dilution effect HKFRS 16 Beibu Gulf Adjusted ne
Slide 26: 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 27: Greater China Portfolio
Greater China Portfolio Region Annual Designed Capacity (TEU) Bohai Rim 31,100,000 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 85,620,000 27
Slide 28: 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 29: 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 30: Thank you!
7 —\™ SQane PSP OsRAA COSCO SHIPPING Ports Limited Thank you!