COSCO Corp Singapore's Cosco (Zhoushan) Shipyard unit yesterday announced that it is owed US$12.4 million by the owner of three Russian-owned fish processing vessels that it undertook repair works for.

The repairs were carried out from August 2007 to October this year. After completion of the work, a sea trial was carried out on Oct 20. However, the crew unexpectedly changed the vessels' course and did not return to their original point on the following afternoon. To compound the situation, 15 Cosco shipyard workers were on board at the time.

However, with the assistance of the Chinese government, the 15 workers returned safely to Cosco Shipyard yesterday. Only US$3.8 million of the US$16.2 million total contractual price for the repair has been paid.

Cosco Shipyard has demanded payment of the outstanding sum in line with the terms of the contract with the owner of the vessels. It is unclear if Cosco has possession of the vessels.

The outstanding sum is not expected to have a material impact on Cosco's net tangible assets and earnings per share for the year ending Dec 31, 2008, the company said.

Cosco shares closed two cents higher at 77.5 cents last Friday.

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Cosco Corp has post 60% growth in net profit in 2Q versus analysts expectation of 42%. Will this set of good result win over the analysts for upgrading of stock price?

The first report I read this morning is from Phillip Securities Research which maintain BUY rating, but fair value has been lowered to S$3.44, citing significantly weaker USD and persistently high steel prices to impinge on profitability for the year.

The second quote is from ccloh: JPMorgan downgrades Cosco to Neutral from Overweight on concerns over impact of high steel prices, lack of earnings visibility; Cuts target price to S$3.00 from S$3.80

News BEFORE Result, 4 August 2008
0205 GMT [Dow Jones] Cosco Corp. may post 42% growth in net profit in 2Q at S$114.4 million vs S$80.4 million in 2Q 2007, shows Dow Jones Newswires poll''s average of 5 analysts; growth likely due to offshore related, higher value added ship repair activities. "With oil prices at record levels, business for Cosco is likely to remain robust as exploration and production activities will continue to drive the demand for rigs and ship repairs," says analyst at foreign bank. 2Q Revenues expected at S$985 million vs S$265.3 million year ago. Results due today after market closes at 0900 GMT. Shares last - 3.3% at S$2.94 vs S$3.04 Friday''s close. (PRV)

News AFTER Result, 5 August 2008
Cosco Corporation (Singapore) Ltd remained on its growth track as it achieved another record quarterly financial performance in Q2 2008. Net profit attributable to equity holders of the Company surged 60% to $128.7 million, while turnover increased by 104% to $1.05 billion, mainly due to ship repair, ship building and marine engineering businesses, which are supported by buoyant order book.

Turnover soared 104% to $1.05 billion in Q2 2008, surpassing the $1-billion mark in a quarter for the first time fueled by solid performances across all key business segments. Gross profit surged 61% from $152.2 million in Q2 2007 to $245.4 million in Q2 2008. This was lifted by higher turnover despite lower gross margin from 29.7% to 23.4% mainly due to higher raw material costs.

Net profit attributable to equity holders of the Company rose 60% from $80.4 million in Q2 2007 to $128.7 million in Q2 2008 backed by strong business expansion and operational efficiencies. Compared to 1H 2007, net profit rose 74% from $122.3 million to $212.6 million in 1H 2008.

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