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COSCO SHIPPING Holdings Announces Annual Results for 2020

Date:2021-03-30 Read times: font size:[ L M S ]

(30 March 2021, Shanghai) - Leading integrated container shipping service provider, COSCO SHIPPING Holdings Co., Ltd. (“COSCO SHIPPING Holdings” or “the Company”) (SSE: 601919; HKEx: 1919) announced today its annual results for the twelve months ended 31 December 2021 (the “Period”). 

In 2020, COSCO SHIPPING Holdings made great efforts to prevent and mitigate the risk of the Covid-19 pandemic so as to ensure health of all its staff, both onshore and offshore, and to overcome unfavorable external factors. Meanwhile, the Company also stuck to the “Customer-centric” business philosophy and adopted the motto of “focusing on high-quality development, innovative development and integrated development” as a guidance. With the aim to forge the new strategic object of “Three Networks as an Integration” (namely shipping routes network, end-to-end logistics network and digital information network), and to aggregate competitive advantages, the Company focused on tapping potential markets in addition to reforming business model and strengthening collaboration and linkage, and devoted fully to ensuring the smooth operation of the global container logistics supply chain. As a result, the Company’s operating performance was greatly improved.

The revenue from the continuing operations of the Company under HKFRS during the Reporting Period was RMB171.259 billion, representing an increase of 13.76% as compared to that of the last year; the Group realised a profit attributable to equity holder of the Company of RMB9.927 billion, representing an increase of 48.38%, including a profit attributable to equity holder of the Company arising from continuing operations of RMB9.927 billion, representing an increase of 632.62% as compared to that of the last year; basic earnings per share was RMB0.81/share. The Board resolved to propose a capitalization issue of 3 shares for every 10 shares to all shareholders of the Company by converting capital reserve to share capital based on the total share capital of ordinary shares of the Company as of the share registration date. 

Fully leverage the advantage of scale and refines the global network 

In 2020, as the market fluctuated since the outbreak of the COVID-19 pandemic, COSCO SHIPPING Holdings actively shouldered its responsibilities and stood by closely to its shipping services, and operated sea routes uninterrupted to bolster the global resumption of work and production as well as economic recovery. While leveraging its advantage of scale fully as a leading global liner, the Company firmly adhered to its globalization strategy, further expanded and improved its global route network layout and strove to expand further its routes coverage.

In 2020, COSCO SHIPPING Holdings timely took advantage of the changes in the global economic and trade patterns during the pandemic to raise its shipping capacity in third-country markets, emerging markets and regional markets, while maintaining its competitive advantage on east-west services. Throughout the year, the cargo volume of the Company’s dual brands (COSCO SHIPPING Lines and OOCL) in emerging markets and non-China markets had respectively risen by 3.6% and 3.0% year-on-year, which served to further refine its global network layout.

In 2020, the OCEAN Alliance, to which the Company belongs, launched the “DAY4” product suite. This product covered 329 vessels, with a shipping capacity of 3.86 million TEUs and 40 groups of alliance routes at the end of the period, and provided customers with a wider range of more stable and efficient services.

In respect of the terminal business, COSCO SHIPPING Ports, a subsidiary of the Company and one of the world’s leading port operators, fully capitalized on its industry chain synergy advantages with the container shipping segment of the Company while putting into practice the concept of “lean operation” to continuously improve the quality and service level of terminals operation throughout the year. In 2020, the Company introduced 45 new routes to its holding terminals, thereby providing stable cargo volume for terminal operation during the pandemic.

During the Reporting Period, the Company’s container shipping business handled a shipping volume of 26.3445 million TEUs, up by 2.35% compared to 25.7391 million TEUs in 2019. COSCO SHIPPING Lines handled a shipping volume of 18.8825 million TEUs, representing a year-on-year increase of 0.52%. The Orient Overseas Container Line Limited (OOCL) handled a shipping volume of 7.4619 million TEUs, representing a year-on-year increase of 7.30%. COSCO SHIPPING Ports achieved a total throughput of 123.8246 million TEU in its terminal business, representing a year-on-year increase of 0.03%.

Innovate business models to ensure the stability of the container logistics supply chain

Facing the pandemic challenge, COSCO SHIPPING Holdings stood by closely to its shipping services, actively improved service standards, refined the customer service system, and resolved customer difficulties. While solving difficulties for customers through measures such as enlarging shipping capacity and optimizing services, the Company leveraged its advantage in global end-to-end transportation network to ensure the quality of route services. This could also ease the unbalance between the supply and demand for container transportation, and at the same time, guarantee the long-term stability of the container logistics supply chain.

In the second half of 2020, the Company took advantage of the container shipping market’s recovery to add 40 vessels to its global routes, thus providing a guarantee to its shipping capacity during the recovery period. To ensure the quality of its route services, the Company actively adopted various measures to ensure the effective connection of schedules. According to the on-schedule rate statistics of Shanghai Shipping Exchange, the Company's on-schedule rate in cargo receipt and delivery ranked first in 2020. This fully reflects the reliability of its schedule service and is thus widely recognized by customers.

Facing the adverse impacts of the pandemic, the Company endeavored to solve the bottleneck in container shipping in line with customers’ demand by rolling out various transportation models such as “water-water trans-shipment”, “water-railway transportation”, “designated logistics vessel”, and “air to sea”, so as to cover the transportation demand in the extraordinary period. In view of the market containers shortage, the Company actively increased the transfer of overseas empty containers to relieve container supply pressure. 

During the Reporting Period, the Company actively accelerated the construction of a new development pattern which features domestic economic loop as the main carriage, to be supplemented by domestic and international economic double-loops. The Company sought to resolve the offshore and onshore blocked points of this economic double-loops, and developed end-to-end projects such as the China-Europe Sea-rail Express, the China-Europe railway services and China Western Land-Sea Trade Corridor to allow organic connection with the “Belt and Road” logistics channels. During the Reporting Period, the volume of container shipments fulfilled on the China-Europe Sea-rail Express had increased by 45% year-on-year. The volume of container shipments completed on the China Western Land-Sea Trade Corridor increased by 74% year-on-year. The China-Europe railway services have been maintaining steady growth.

To resolve small and medium-sized enterprises’ export difficulties in the wake of the epidemic, the Company launched small and medium-sized customer service line on some routes to make available to these clients cabin-guaranteeing and container-guaranteeing services. It served to effectively simplify the communication process of freights for small and medium-sized customers.

Accelerating transformation and upgrade with new achievements seen in digital construction

In 2020, the Company accelerated its pace of digital transformation and upgrading, and actively promoted the application of artificial intelligence, blockchain, big data, Internet of Things, 5G and other technologies in the shipping field, and proactively improved its supply chain service integration capability and comprehensive capability in research, judgment and analysis, and its efficient collaborative operation capability.

Firstly, in terms of improving the efficiency of middle- and back-office operations, the Company relied on the IRIS-4 system to maintain a rapid response to remote service. It laid down a crucial foundation for raising the Company's marketing and customer service standards. Secondly, in terms of optimizing front-end services, the Company leveraged e-commerce platform to tap online products vertically and expand its global market coverage horizontally, in order to meet its customers’ demands for “no contact” services. As a result, COSCO SHIPPING Lines, a subsidiary of the Company, was able to post a year-on-year increase of 270% in the container volume of e-commerce international trade transaction services in 2020. Thirdly, in terms of building an industrial chain ecosystem, the paperless imported cargo discharge model powered by blockchain technology had received wider promotion, which illuminated the Company’s advantages in digital networking. In November 2020, COSCO SHIPPING Lines launched jointly with the Bank of China and other partners the world’s first blockchain bill of lading with a property right.

In May 2020, Xiamen Ocean Gate Terminal of COSCO SHIPPING Ports commenced  operation as the first all-5G-covered smart port in China. Currently, the basic 5G coverage of the port zone has been completed. By leveraging technologies such as edge computing, high precision location service, artificial intelligence and computed visualization, the terminal can realize 5G deployments such as autonomous driving, smart cargo tally, AGV management, smart security protection and others.

In-depth utilization of synergistic potential to reduce cost and save expenses while guaranteeing service quality

In 2020, the global container logistics supply chain had been impacted by the COVID-19 pandemic. While striving to ensure the quality of customer service, the Company made good use of the synergistic potential of the dual-brand in the container shipping business by utilizing its advantageous dual-brand fleet network to improve and strengthen the cost and commercial synergies between the two brands and promote integration of mid- and back-office functions and otherwise, so as to enable continuous application of dual-brand synergies.

In the field of fuel procurement, the Company took advantage of the low market price level to lock in low-sulfur fuel sources for foreign trade in 2020 and 2021 to achieve the lowest cost on the basis of keeping up quality and supply. In fuel utilization, the Company refined its management further in maritime operations, and gave full play to the synergistic advantages between the terminal business and the container shipping business to ensure the operational efficiency of its fleet, achieving positive results.

During the Reporting Period, the Company strengthened the overall management of its capitals and debts and further reduced its corporate capital costs by leveraging a window period in global monetary policy, and by seizing advantageous market opportunities in the interest rate market and foreign exchange rate market. As a result, the Company’s financial expenses decreased significantly by 17.60% compared to last year, and the asset-liability ratio at the end of the Reporting Period decreased by 2.58 percentage points compared to the beginning of the Reporting Period. The Company continued to optimize the asset-liability structure, and further consolidated its competition base.

Fulfilling social responsibilities and leading the sustainable development of the industry

In 2020, the Company endeavored to open up the “green channel” for the export of epidemic prevention materials and improved cargo transportation efficiency in all aspects from cargo loading and unloading, to ship berthing and document handling. This was to ensure that all epidemic prevention materials and emergency supplies, such as masks and medical devices urgently required during the outbreak, were shipped to relevant areas as soon as possible. 

The Company had a high concern over the physical health of its staff. By effectively implementing epidemic prevention measures, the Company coordinated crew shifting between related parties, which accounted for more than 13,000 crew members and actively promoted the crew members' vaccination.

In 2020, with the IMO2020 low sulphur cap policy coming came into effect, the Company strictly implemented the low-sulfur oil policy and continued promoting and using various advanced energy-saving and emission reduction technologies. The Company also sought to effectively reduce fuel consumption through management measures such as optimizing fleet structure and shipping routes, and improving ship operation efficiency in ports, thereby reducing business operations' impact on the environment. In September, COSCO SHIPPING Lines was awarded again a gold prize by the U.S. Environmental Protection Agency as part of the “Protecting the Blue Whales and the Blue Skies” Program.

The Company carries forward the international humanitarian spirit to take rescue operations for ships in distress. On 13 September 2020, the Company’s vessel COSCO MALAYSIA successfully rescued a sailboat in distress and four personnel on board in the waters of the Gulf of Mexico, 130 nautical miles west of Port of Tampa Bay, Florida, the United States.

Looking forward into 2021, COSCO SHIPPING Holdings will continue its mission in global transportation. While striving to the epidemic prevention and control, the Company vows to focus on the “Three Links” (double cycle link, new ecosystem link and outstanding performance link), and constantly optimize the global shipping network, and expand the end-to-end service value link. Meanwhile, the Company will proactively get hold of the opportunities presented by the economic growth in China and global economic recovery for the global freight market, to strengthen its dual-brand strategy synergy and advocate for digital revolution in the industry. The Company will continuously improve customer service capabilities, and strive to build the Company into one of the most popular benchmarking enterprises with the highest international brand value in the transportation industry and in the capital market. The company will provide better services to customers and create greater value for shareholders.

About COSCO SHIPPING Holdings Co., Ltd.

COSCO SHIPPING Holdings Co., Ltd. (“COSCO SHIPPING Holdings”, Stock Code: 1919.HK; 601919.SS) is the listed company controlled by China COSCO SHIPPING Corporation Limited. The Company was listed on the Hong Kong Stock Exchange in June 2005 and the Shanghai Stock Exchange in June 2007.

The Company focuses on container shipping and terminal operations. As at December 31 2020, the Company operates a total fleet capacity of 536 ships and 3.074 million TEUs through its wholly-owned subsidiary COSCO SHIPPING Lines and its holding subsidiary Oriental Overseas International, ranking the third in the global industry. COSCO SHIPPING Ports, another subsidiary of the Company, operates a total of 210 container berths in 36 ports worldwide, with designed processing capacity of 136 million TEU annually. COSCO SHIPPING Holdings is committed to become a top-tier integrated container shipping service provider with its continuing efforts to build up a global network, provide customers with comprehensive solutions and create greater returns for shareholders.

Media Enquiries

COSCO SHIPPING Holdings Company Limited

Xu Junjie / Huang Jingkai

Tel: (86) 021-6029 8620 / (86) 185 1617 9776

Email: investor@coscoshipping.com 

PRChina Limited

Jack Liu / Alice Yip

Tel: (852) 2522 1838/ (852) 2522 1368

Email: zyliu@prchina.com.hk/ ayip@prchina.com.hk

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