COSCO SHIPPING Holdings realized a net profit of RMB28.40 billion

COSCO SHIPPING Holdings Co., Ltd. (“COSCO SHIPPING Holdings” or “the Company”, SSE: 601919; HKEx: 1919) announced its 2023 annual results.

 

In 2023, in the face of weakened shipping demand, accelerated industry transformation and intensified market competition, COSCO SHIPPING Holdings focused on the development of “digital intelligence” and “green and low carbon” transition. It actively forged new development capabilities and created new growth drivers, leading to persistent enhancement of the Company's high-quality development. The Company's core competencies continuously improved, with new achievements in high-quality development were made.

 

1. During the Reporting Period, the Company posted EBIT of RMB36.67 billion and realized a total profit of RMB33.08 billion. It realized a net profit of RMB28.40 billion, of which the net profit attributable to the shareholders of the Company was approximately RMB23.86 billion, demonstrating its operational resilience.
 

2. Digital transformation of the Company's supply chain progressed steadily. During the Reporting Period, the revenue from the supply chain amounted to RMB29.05 billion (excluding shipping charge), accounting for 17.28% of the revenue from the container shipping business and significantly increased 8.62 percentage points year-on-year.
 

3. As of the end of 2023, cash and cash equivalents reached RMB181.11 billion and net cash inflow from operating activities was RMB22.61 billion.
 

4. Through the previous optimization of equity investment, the investment income increased by 88.85% year-on-year to RMB4.75 billion during the Reporting Period, which enabled the Company to withstand the cyclical fluctuations.
 

5. During the Reporting Period, the Company continued to deepen lean management, with operating costs decreased by 32.68% year-on-year; as of the end of 2023, the Company’s asset-liability ratio was 47.40%, representing a decrease of approximately 3 percentage points from the previous year. Its financial structure was continually optimized.
 

6. In order to safeguard the Company's fair value and shareholders’ rights and enhance investors’ confidence, COSCO SHIPPING Holdings repurchased its A-shares and H-shares. As of the end of February 2024, it repurchased about a total of 215 million A-shares and H-shares, and all of the repurchased shares were canceled.
 

7. Based on the 2022-2024 shareholder dividend reward program of the Company, the board of directors proposed a final dividend of RMB0.23 per share (tax inclusive) for the year 2023. Together with distributed interim dividend, the annual dividend payment for the year will amount to approximately RMB 11.866 billion (tax inclusive), representing the dividend payout ratio of approximately 50%.

 

In 2023, COSCO SHIPPING Holdings steadily promoted its global development, supply chain construction, digital intelligence and green low-carbon transformation, thereby effectively alleviated the pressure brought about by the weakening of traditional market demand and the increasing supply-demand imbalance.

 

Steady improvement of global service capability
 

In 2023, COSCO SHIPPING Holdings' subsidiaries deployed six 24,000 TEU eco-friendly container vessels and one 14,000 TEU Latin America’s extreme container vessel on the Asia-Europe routes and the emerging market routes respectively. During the Reporting Period, the Company enhanced its competitive edges in the east-west trunk routes and further strengthened the business layout and development of emerging markets, regional markets and third-country markets. It successively launched and upgraded the self-operated routes between Europe and South America East Coast, a number of routes between the RCEP member countries, the Far East-Africa routes, the Kenya-Mozambique feeder routes and the Mediterranean-North Africa feeder routes. The development of Chancay Port Terminal in Peru was expedited and an agreement for the partial equity acquisition of the Port of Sokhna in Egypt was signed, thereby enabling the Company to capture the opportunities arising from the rapid growth of the emerging and regional markets and turn them into new growth drivers. Meanwhile, with the extension of the cooperation period of the Ocean Alliance to 2032 and the release of OCEAN Alliance DAY 8 Product, COSCO SHIPPING Holdings’ ability to serve global trade was steadily improved.

 

Accelerated development of full-chain resources
 

In 2023, COSCO SHIPPING Holdings accelerated the development of full-chain resources based on the creation of a global digital supply chain ecosystem providing “container shipping + ports + related logistics” services. The initiative produced fruitful results. Leveraging the world’s leading shipping and port network, COSCO SHIPPING Holdings gave full play to the synergies between port and shipping businesses, whereby effectively improving the punctuality rate of shipping services and cargo delivery efficiency. Continuing efforts were made to develop overseas warehouses and multimodal transportation system around the hub ports such as Piraeus, Abu Dhabi, Valencia and Zeebrugge. The sea-rail intermodal transportation services such as the Western China land-sea trade corridor and the China-Europe Sea-Rail Express were successfully upgraded. As for supply chain operation platform and resource development, the Group’s capacity was enhanced within a relatively short period of time and was able to mobilize more than 7,000 trailers per day in China and more than 5,000 trailers in overseas markets. Its customs clearance service covered 151 prefecture-level cities in China and 43 overseas countries. Nearly 100 online warehousing service products were rolled out, resulting in persistent improvement of its integrated service capability.

 

Persistent enhancement of digital intelligence operation
 

In 2023, COSCO SHIPPING Holdings accelerated the digital transformation, providing strong support for high-efficiency operation of full-chain resources and the innovation of product combination. SynCon Hub, an e-commerce platform under COSCO SHIPPING Holdings, was integrated with physical full-chain resources. Based on the massive launch of customized products such as the “Talent”, “Hi”, and “FOR FOR TUNE”, the Company rolled out tailor-made supply chain products such as “warehousing and distribution” products, “customs clearance” products and “MERIT YOUR TRUCKING” products both in China and overseas. The Company made use of digital means such as customer digital profiling, supply chain control towers and intelligent customer service platforms to provide customized and personalized full-process supply chain solutions for various industries. During the Reporting Period, its cargo throughput of vehicle exports, lithium batteries, photovoltaics and cross-border e-commerce grew by 146%, 56%, 24% and 75%, respectively. The GSBN platform which COSCO SHIPPING Holdings helped create and operate attracted enterprises from different sectors such as shipping, ports, banks, insurance and shippers. It launched products such as blockchain bills of lading, paperless cargo release, electronic insurance policies and electronic cargo transportation condition appraisal certificates. COSCO SHIPPING Holdings issued over 100,000 blockchain electronic bills of lading, and the paperless cargo release services served more than 2 million TEU. The construction of a blockchain ecosystem by upstream and downstream enterprises in the supply chain began to take shape.

 

Significant achievements in green and low-carbon transformation
 

In 2023, COSCO SHIPPING Holdings attached great importance to green and low-carbon transformation in throughout the entire process of high-quality development. In terms of green fleet development, the building of twelve 24,000 TEU methanol dual fuel container vessels steadily progressed, and the contract for the methanol dual-fuel retrofit project for four vessels was signed. And the world’s first 700 TEU pure electric container vessel was officially put into operation. At the same time, another new progress was made in pioneering the bunkering of its vessels with biofuels, accumulating solid strength for green fleet construction. In terms of green port development, all of domestic ports in which the Company held controlling interests are equipped with shore power facilities. A total of 4,060 vessels had been connected to shore power, and the power connected surged by 214% year-on-year. At the same time, COSCO SHIPPING Ports vigorously developed distributed photovoltaic projects, with total installed capacity as of the end of 2023 reached 10 MW and the expected average annual power generation amounted to 9 million kWh. In recognition of the Company's outstanding performance in environmental protection and sustainability, COSCO SHIPPING Holdings has won the “Sapphire Award”, the highest award of the US “Protecting Blue Whales and Blue Skies”, for many years in a row. During the Reporting Period, it was selected as the constituent stocks of the “CSI China Reform Central State-Owned Enterprises ESG Growth 100 Index” and the “Hang Seng Corporate Sustainability Index Series” respectively, establishing the Company itself as a green growth promoter.

 

Looking ahead to 2024, the global container market will encounter both of opportunities and challenges. On the one hand, the outlook for global trade generally remains positive, inflation rates are expected to gradually come down, and the potential demand from emerging markets will be further unleased. On the other hand, there are also various challenges, such as geopolitical tensions, faster green transformation and a surge in the delivery of new ships.

 

COSCO SHIPPING Holdings will adhere to its mission of “accelerating the development of the Company into a world-class shipping technology enterprise”, positioning itself as a “global digital supply chain operation and investment platform with primary focus on container shipping”. It will actively promote the innovation of supply chain ecosystem, the ecosystem of intelligent networking and the ecosystem of green and low-carbon development, providing better services for customers and creating greater value for shareholders.

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