Cosco Shipping Ports Limited · HKEX:1199
Cosco Shipping Ports — Q1 2021 Earnings Presentation
37 slides from Cosco Shipping Ports's earnings presentation, Apr 27, 2021
Slide 1: 1Q2021 Results Presentation
1Q2021 Results Presentation Capturing Strategic Development Opportunities Continuing to Enhance Lean Operations April 27, 2021
Slide 2: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 3: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 4: Outstanding 1Q2021 Performance with Strong YoY Growth Momentum
Outstanding 1Q2021 Performance with Strong YoY Growth Momentum ➢ 1Q21 equity throughput recorded a YoY increase of 7.2% to 9.3 million TEU, maintaining recovery momentum ➢ 1Q21 terminal profit posted a robust YoY growth of 76.2% to USD 93.9 million, the strongest quarterly YoY growth since 1Q2020 Eq
Slide 5: Highest 1Q Terminal Profit & Terminal Profit per TEU since 2016
Highest 1Q Terminal Profit & Terminal Profit per TEU since 2016 ➢ In 1Q2021, we have achieved the highest 1Q terminal profit as well as the highest 1Q terminal profit per TEU on the back of our lean operation strategy and macro environment improvement Terminal Profit (USD) Terminal Profit per TEU (U
Slide 6: Sustainable High Dividend Yield and Long-term Investment Value
Sustainable High Dividend Yield and Long-term Investment Value ➢ We have confidence of being the best yield play within this industry Dividend Yield (1) 1199 Peers Average 5.3% 4.9% 5.4% 4.3% 5.0% 4.2% 5.2% 4.1% 4.1% 3.7% 2016 2017 2018 2019 2020 Notes: (1) COSCO SHIPPING Ports’ dividend yield is ca
Slide 7: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 8: Financial Highlights – Strong Profitability in 1Q2021
Financial Highlights – Strong Profitability in 1Q2021 (US$ million, unless stated otherwise) 1Q2020 1Q2021 YoY Change (%) Revenue 220.5 265.3 +20.3 Cost of sales 174.9 203.4 +16.2 Gross profit 45.6 61.9 +35.9 Share of profits from Joint Ventures & Associates 52.3 81.0 +54.8 Net profit attributable t
Slide 9: Revenue & Costs – Solid 1Q2021 Revenue Growth & Cost Control in the Greater China Region
Revenue & Costs – Solid 1Q2021 Revenue Growth & Cost Control in the Greater China Region Revenue (US$ million) Cost of sales (US$ million) 265.3 203.4 2.2% 4.6% 3.1% 174.9 220.5 CSP Abu Dhabi 3.2% 2.7% 4.3% 4.7% Nantong 4.3% 2.6% 27.2% 3.0% 3.3% 3.8% 31.8% 27.8% CSP Zeebrugge 31.7% 16.6% CSP Spain 1
Slide 10: Terminals Profit – Robust Terminal Profit Growth in 1Q2021
Terminals Profit – Robust Terminal Profit Growth in 1Q2021 ➢ Benefiting from further throughput recovery as well as effective Lean Operations strategy, 1Q2021 terminal profit surged by 76.2% YoY and the portfolio has been further diversified Terminals Profit by Regions (US$ million) Top 10 Terminal
Slide 11: Financial Position – Maintaining Strong Balance Sheet
Financial Position – Maintaining Strong Balance Sheet ➢ As at the end of 1Q2021, our cash position has been strong with cash and cash equivalents of USD 1.27 billion ➢ Net gearing ratio remained at healthy level at 27% (US$ million, unless stated otherwise) As at 31 Dec 2020 As at 31 Mar 2021 Total
Slide 12: Capital Expenditure
Capital Expenditure FY2019 CAPEX: Total – US$624m 1Q2021 CAPEX: Investments – US$224m PP&E – US$400m Total – US$54.9m Investments – US$8.8m Examples: PP&E – US$46.1m • QPI (Added equity interest) • Beibu Gulf Port (Added equity interest) Example: • CSP Zeebrugge CFS • Vado (Capital increase) FY2018
Slide 13: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 14: Operational Results – Strong Throughput Growth in 1Q2021
Operational Results – Strong Throughput Growth in 1Q2021 Total Throughput Equity Throughput 1Q2020 1Q2021 YoY Change 1Q2020 1Q2021 YoY Change ('000 TEU) ('000 TEU) - Subsidiaries 5,097 5,366 +5.3% - Subsidiaries 3,340 3,403 +1.9% - Non-subsidiaries 22,382 24,822 +10.9% - Non-subsidiaries 5,331 5,890
Slide 15: Global Footprint and Opportunities
Global Footprint and Opportunities Key Overseas Annual Designed Terminals Capacity (TEU) PCT (1) 6,200,000 CSP Spain Group (1) 5,100,000 CSP Abu Dhabi (1) 2,500,000 CSP Zeebrugge (1) 1,300,000 Chancay (1) 1,000,000 RSGT 5,200,000 Suez Canal 5,000,000 COSCO-PSA 4,850,000 Antwerp 3,700,000 ➢ Strategic
Slide 16: Enhance Synergy in Subsidiaries– Secured Demand with Shipping Alliances
Enhance Synergy in Subsidiaries– 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) (1Q2021 YoY Change) COSCO SHIPPING Lines OOCL Evergreen + CMA ➢ Contribution from
Slide 17: Promoting Value-Added Supply Chain Extension Projects
Promoting Value-Added Supply Chain Extension Projects CSP Abu Dhabi CFS CSP Zeebrugge CFS ACCELERATE THE EXTENSION OF SUPPLY CHAIN INCREASE NEW EARNINGS GROWTH DRIVER ➢ Develop the supply chain business and accelerate the construction of the extended supply chain platform ➢ Build up logistics networ
Slide 18: Technology Development to Facilitate Lean Operations
Technology Development to Facilitate Lean Operations 2021 Coming2020 3-4 years Wuhan Terminal and Application of Navis Nantong Terminal will N4 system to most of implement Navis N4 our subsidiaries in system in 2021 the coming 3-4 years ➢ Actively advocated 5G smart ports ➢ Demonstration port for 5G
Slide 19: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 20: Global Layout and Lean Operations
Global Layout and Lean Operations Capitalize on ➢ Identifying potential projects and tapping into strategic subsidiaries and profitable non- global growth and subsidiaries amid global growth to enhance balanced global network optimize terminal portfolio ➢ Restructuring terminals through port resourc
Slide 21: Optimizing Terminal Assets Portfolio
Optimizing Terminal Assets Portfolio ACQUISITIONS DISPOSALS Beibu Gulf Terminal Yangzhou Yuanyang Terminal & is expected to share the benefits of economic growth in Zhangjiagang Terminal Southwest China and Southeast Asia disposal gain after tax of around USD$61M RSGT Jiangsu Petrochemical has a wid
Slide 22: Lean Operations – Cost Reduction
Lean Operations – Cost Reduction Cost Reduction ➢ Develop cost management system focusing on financial control and featuring “cost per TEU” to enhance terminal operations and management; incorporate “cost per TEU” in KPI to set Cost operating cost control targets for subsidiaries Reduction Lean ➢ Fa
Slide 23: Lean Operations – Revenue Growth and Headquarters’ Empowerment
Lean Operations – Revenue Growth and Headquarters’ Empowerment ➢ Develop customer analysis model to identify profit contribution from shipping companies and container types, allowing headquarters and terminals to engage customers and leverage on their competitive edges to enhance effective marketing
Slide 24: 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 25: Lean Operations – Increase Revenue
Lean Operations – Increase Revenue ➢ Strengthen overall marketing activities and negotiation strategies to further tap customer Increase volume proportion from third-party customers (1) value. Terminals maintain good relationship FY20 Actual proportion FY21 Target proportion 70% 62.7% with shipping
Slide 26: 5-Year Target Plan
5-Year Target Plan To achieve targets by the end of 2025 (1) Equity throughput 57 million TEU 5-year growth rate 48% (5-year CAGR of about 8.2%) Operational cost per TEU Decrease by 15~20% in 5 years (Annual average decline by 3~4% in 5 years) Notes: (1) Year 2021 - year 2025 26
Slide 27: Outlook
Outlook Challenges Opportunities ➢ Negative impact to global economy due to COVID-19 ➢ Long term opportunities for overseas terminals development ➢ Sino-US trade tensions ➢ Opportunities amid domestic terminals consolidation ➢ Good prospect on the back of our effective Lean Operations strategy ➢ Glo
Slide 28: Q & A Session Thank you!
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Slide 29: Agenda
Agenda 1 Recovery & Stable Dividend Policy 2 Financial Highlights 3 Operational Review 4 Strategy & Outlook 5 Appendix
Slide 30: Increasing Overseas Exposure
Increasing Overseas Exposure Equity Throughput by geographic location (%) Overseas Equity Throughput (TEU) 12.7 M 12.5 M 10.7 M 71.2% 68.1% 67.4% 79.3% 77.3% 7.4 M 6.1 M 28.8% 31.9% 32.6% 20.7% 22.7% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Overseas Greater China Overseas 30
Slide 31: On Track to Achieve Our 5-Year Target
On Track to Achieve Our 5-Year Target 2016 2020 2021 Restructuring Where we were Vision ◆ As a pure port operator ◆ No. of subsidiaries increased Operations: to 14 (FY2016: 10) ◆ Global terminal network ◆ 3 core strategies ◆ Industry leader in terms of ◆ Linkage effects in costs, total container thr
Slide 32: Return On Equity (ROE) Improvement – Newly Acquired Terminals to Catch Up
Return On Equity (ROE) Improvement – Newly Acquired Terminals to Catch Up ROE 6.6 6.5 (3) (%) 6.3 4.8 (2) 3.5 (1) FY2016 FY2017 FY2018 FY2019 FY2020 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
Slide 33: 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 34: 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 35: 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: 35
Slide 36: 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 37: Thank you!
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