Dear Shareholders,
First of all, I would like to take this opportunity to express my heart-felt gratitude to all shareholders for your care and support to the Group. I also wish to extend my sincere gratitude to all directors, supervisors, members of the senior management and diligent staff of our Group for their dedicated efforts during the past year.
In 2009, the global shipping industry slumped due to the global financial crisis. Our container shipping and dry bulk shipping businesses were seriously affected. The Group weathered the difficulties and challenges by actively developing new markets and strictly controlling costs to minimize our loss.
In face of the unusually challenging environment, the Group strictly managed its investment scale, successfully issued medium-term notes and adopted effective measures to secure the cash flow and capital of the Group. In addition, the Group's continuous efforts in the improvement of its corporate governance received wide recognition. The Group was presented with 23 awards, including "the Best Board of Directors Award（最佳董事會）", "Management Excellence Award for Listed Companies（最佳優秀管理團隊）" the "Reliable Enterprise Award（信譽企業集團大獎）" and "Top 100 Listed Companies with Excellent Market Value（上市公司價值百強）".
During the period under review, the Group's revenue was RMB68,462,514,000, representing a 48.1% decrease from last year, and the loss attributable to equity holders of the Group amounted to RMB7,467,812,000, as compared to the profit attributable to equity holders of the Group amounted to RMB11,606,134,000 of last year. Due to the loss, the Board does not recommend the payment of final dividend.
During the period under review, the completed shipping volume of the Group's container shipping and related business was 5,234,292 TEUs, representing a decrease of approximately 9.6% compared to the same period last year. Revenue from container shipping operations was RMB27,509,979,000, representing a decrease of 38.5% from the same period last year.
In 2009, the Group promptly responded to the precarious conditions of the container shipping market by controlling fuel oil costs, container management costs and other management costs. The Group also restructured and reallocated the capacity of its container vessels in response to the market situation. The Group further expanded and strengthened its portfolio of key customers and direct customers and actively secured containers with high profit margin so as to maintain its market share. The Group capitalized on the market opportunities and implemented schemes to revive shipment costs and keep pace with the reviving market. Capitalising on the booming domestic demands driven by the economic stimulus policy, the Group captured domestic trade opportunities. In proactively implementing the measures of increasing number of vessels and reducing speed, the Group was able to absorb shipment capacity and control the consumption of fuel. The Group further strengthened its cooperation with CKYH through centralized shipping arrangement, coordination of port services and cooperation with feeders and land transporters.
During the period under review, five new container vessels were delivered for operation with an aggregate capacity of 29,793 TEUs. After excluding the chartered-in capacity, self-operated capacity decreased by 1.7% year-on-year. No new vessel orders were placed in 2009. As at the end of 2009, the Group had 54 container vessel orders, representing a total of 414,926 TEUs.
During the period under review, shipping volume of the Group's dry bulk shipping business amounted to 271.54 million tons, representing a decrease of 7.36% over the same period last year. Dry bulk shipment turnover was 1.4 trillion ton-nautical miles, representing a decrease of 6.67% over the same period last year. Of the total dry bulk shipment turnover, coal shipping volume amounted to 85.13 million tons, representing a year-on-year decrease of 4.72%; metal ore shipping volume amounted to 122.43 million tons, representing a year-on-year decrease of 0.73%, and shipping volume of other cargoes amounted to 63.98 million tons, representing a year-on-year decrease of 20.44%. The Group generated revenue of RMB27,367,246,000, representing a decrease of 61.8% as compared with the same period of last year.
The Group adopted a conservative approach in light of the enormous changes in the international dry bulk shipping market by capturing market opportunities and optimising the structure of our dry bulk fleet. The Group also concentrated on soliciting quality customers and securing cargo resources, in line with its plan to develop key accounts. Management processes were streamlined to reduce key operating costs. In addition, risk management measures were reinforced to closely monitor customers’ credit risks.
As at 31 December 2009, the Group operated 439 dry bulk vessels (36,572,031 DWT), and remains a global leader in terms of dry bulk fleet size.
During the period under review, revenue from the logistics business of the Group amounted to RMB12,127,039,000, representing a decrease of 14.5% as compared with the same period in 2008. Project logistics of the Group achieved significant progress through the establishment of a land transportation platform for bulky containers, fleets of self-operated barges and an international chartering centre for project logistics. Regarding product logistics, the Group focused its efforts on exploring new markets while extending its scope of business, optimising its service models and accelerating the efforts to cultivate the ability to offer high-end services, all with a view to further consolidate its leading position in the specialised logistics segment and build up its reputation in the domestic and international markets. Regarding the shipping agency business, the Group leveraged on its well-rounded marketing framework and formulated proposals that are catered to core customers. Through interaction with clients and sharing of information, the Group strengthened its cooperative relationship. For the freight forwarding business, the Group utilised information systems to enhance the quality of services and to develop its integrated freight forwarding operations, providing its customers with comprehensive and high-tech freight forwarding services.
During the period under review, the terminal business of the Group remained stable overall, and adjusted the operating strategies and measures, implemented strict cost controls and prudently explored the terminal market for its terminal business in a timely manner in response to market changes. The Group had successfully taken over Pier 2 and Pier 3 of the container terminal of Piraeus Port in Greece in October 2009.
As at the end of 2009, the Group held equity interests in 28 terminal joint-ventures, which amounted to 142 berths, and the number of terminals controlled by the Group increased to 6. Container terminal throughputs in which the Company held interests were 43.55 million TEUs, representing a decrease of 5% over the same period last year, which was above the average in the container terminal industry. Currently, the market share of container terminal business of COSCO Pacific in global terminal market is around 6.1%, with its ranking as the fifth largest global terminal operator maintained.
As for container leasing, Florens, a subsidiary of COSCO Pacific, continued its after-sales entrustment management model, controlling its number of containers size effectively to maintain its leading position and continued to be ranked as the second largest container leasing company in the world, accounting for approximately 14.3% of market share of global container leasing business. This represented an increase of 0.7% as compared with 2008. The average container leasing rate thorough 2009 remained higher than that of its peers.
Looking forward to 2010, according to the forecast by International Monetary Fund ("IMF") in early April, the growth rate of the global economy is expected to be 4.1%. Following the gradual recovery of the global economy, the Group expects the shipping industry to be in the recovery stage in 2010, while the market will continue to fluctuate. With the development in the global economy and the rise of emerging markets, the centre of the shipping sector is expected to shift to the developing countries. The Asian regions, particularly the PRC, are expected to have stronger presence in the shipping sector in the post economic crisis era.
Market demand for the container shipping market is likely to pick up again. However, as more time is required for the demand-supply structure to adjust itself, there will still be great pressure in respect of the operating conditions. In respect of dry bulk shipping, demand for raw materials such as iron ore and coal is likely to rebound. PRC-related factors will bolster the development of dry bulk shipping. As for the logistics business, as the PRC economy continues to grow, in particular, with the gradual implementation of stimulus plans in the PRC, the structure of the logistics industry in the PRC will soon be improved to capture new opportunities for growth. The future of the container port industry is full of challenges. Yet, the PRC's leading position in the recovery will give an impetus to the Group's terminal business.
Dear shareholders, your continuous trust and support are our most valuable assets. Under the current difficult situation, China COSCO will actively embrace new challenges by adopting innovative ideas and effective measures and strive for positive results by seizing market opportunities. In order to establish a capital platform for COSCO, the Company will continue to actively facilitate the implementation of overall strategy in accordance with the principle of "overall planning and implementing in phases".
Wei Jiafu
Chairman
22 April 2010
|
