2008 final results - todayir · 2008 divisional profit contribution breakdown. others 11.7%...

2008 Final Results2008 Final Results9 April 2009

COSCO PACIFIC LIMITED

Press conference_2009_0409 P. 2

ChairmanChairman’’s statements statement


Global economic downturn Global economic downturn triggered by the financial tsunami in 4Q2008triggered by the financial tsunami in 4Q2008

3.8%

7.6%

12.0%13.0%

23.5%

2.1%4.2%

7.2%9.0%

17.8%

-1.7pp

yoy change

Global GDP Global Containerized Trade China GDPChina

Imports & Exports

-4.8pp -4.0pp

-5.7pp

2007 2008 2007 2008 2007 2008 2007 2008 2007 2008

Global Trade

-3.4pp

Sources：Economist Intelligence Unit (March 2009) 、Drewry (4Q2008) 、China Customs


Stable performance in 2008Stable performance in 2008

Profit attributable to equity holders: USD 275m 2.5%

Steady development of terminal business

– Total throughput: 45.88m TEUs 17.7%

– Strengthened its leading position as the fifth largest global container terminal operator

Satisfactory performance of container leasing business

– Container fleet size expanded by 6.7% to 1.62m TEUs with utilization rate of 94.6%

– Ranked as the world’s second largest container leasing company


Proposed a final dividend of HK10.7 cents per share. Together with the interim dividend of HK27.4 cents per share, total full-year dividend for 2008 will be HK38.1 cents, down by 48.1%

Adjust the dividend payout ratio to 40.0% (2007: 56.6%) and provide scrip dividend alternative so as to retain cash for the future business development.

In addition to preserving cash, the scrip dividend alternative provides shareholders with an option to reinvest in COSCO Pacific.

Dividend payoutDividend payout


Four transformation strategy Four transformation strategy leads to a solid profitability of terminal divisionleads to a solid profitability of terminal division

CONTROL:From an investment-based model to a control-based model by obtaining controlling stakes in new terminal investments

GLOBALISE: From solely focusing on terminal investment in China to being a global player with the primarily focus on China

DIVERSIFY: From investing solely in container terminals to a diversified terminal portfolio

REVALUE:From profit-centric strategy to value-maximizing strategy


A year with unprecedented challenges in 2009A year with unprecedented challenges in 2009

The precipitous decline in trade activity is damaging the markets and industries

– During the first two months of 2009, China trade volume and China port throughput declined by 27.2% and 15.0% respectively

– Terminal and container leasing industries are in difficult situation which is highly likely to last for the full year of 2009

China plays an important role in stimulating the global economy and China GDP growth is expected to be about 8%

To meet challenges ahead, we maintain our prudent financial policy with risk management playing an important part of our long term planning.


Long range planning Long range planning

With the strong support from COSCO Group, China COSCO’s shipping

fleet and COSCO Pacific will fully leverage its business synergy so as to

strengthen its core competence among our peer group’s competitors.

Further strengthen our cooperation with terminal business partners so

as to overcome difficulties arising from the volatile markets and to make

solid progress towards our long-term development targets.

COSCO Pacific is confidential that our long range planning will steer it

through the current financial storm and should be beneficial to its long

term stability and lead to a solid profitability for our shareholders.


Vice ChairmanVice Chairman’’s report s report


Turnover: USD 338m 13.1%

Profit attributable to equity holders: USD 275m 2.5%

Profit contribution* from four major businesses: USD 334m remained flat over 2007

Total assets: USD 4.21 billion 8.8%

Terminals38.4%

Container leasing42.3%

Containermanufacturing

11.8%

Logictics7.5%

2008 Divisional profit contribution breakdownOthers11.7%

Terminals37.3%

Containerleasing31.3%

Containermanufacturing

13.9%

Logistics5.8%

Total assets breakdown as at 31 Dec 2008

Stable performance of core businesses in 2008Stable performance of core businesses in 2008

* The profit contribution excluded net interest expenses and net corporate expenses.

Profit contribution USD YOY

Terminals 128m Flat

Container leasing 141m 19.5%

Container manufacturing 39m 42.5%

COSCO Logistics 25m 27.2%


Expand the global terminal networkExpand the global terminal network

Witnessed by President Hu Jintao of China and Prime Minister Kostas Karamanlis of Greece, Dr. Wei Jiafu, the President of COSCO Group, signed on behalf of COSCO Pacific a concession agreement of Piers 2 and 3 of Piraeus port on 25 November 2008.

Pier 3 Construction:Build 1.1M TEUs

by 2015

Pier 2 Upgrade: Expand capacity

fromexisting 1.6M TEUs

to 2.6M TEUs by 2014

Piraeus is the largest port in Greece. The total annual handling capacities of Piers 2 and 3 of Piraeus Port is expected to reach 3.7m TEUs before 2015 and it will become an important hub port in the Eastern Mediterranean region.


Solid growth of terminal businessSolid growth of terminal business

13.3%

12.1%

11.0%

8.7%

5.5%

2.9%

2.7%

2.1%

1.6%

1.5%

HPH

APM Terminals

PSA

DP World

中遠太平洋

MSC

Eurogate

Evergreen

SSA Marine

HHLA

COSCO Pacific’s terminal portfolio includes 146 berths located at 19 ports in China and overseas, among which 124 berths in China and 22 berths at overseas.

Total number of operating berths: 89

Total throughput grew by 17.7% to 45.88m TEUs in 2008

Ranked as the fifth largest global container terminal operator with 5.5% market share. Source：Drewry Shipping Consultants Limited (Sept 2008)

Top 10 global container terminal operators

COSCO Pacific


Steady performance of terminals in ChinaSteady performance of terminals in China

Number of operating berths in China: 79

Handled 41.15m TEUs in 2008 up 11.1% and represented 89.7% of COSCO Pacific’s total throughput

Bohai Rim

Throughput: 17.10m TEUs 6.4%

37.3% of COSCO Pacific’s total throughput

Yantze River Delta



Pearl River Delta and Southeast Coast




Satisfactory performance of overseas terminalsSatisfactory performance of overseas terminals

No. of overseas berths: 10

Handled 4.73m TEUs in 2008 up 143.2% and represented 10.3% of COSCO Pacific’s total throughput.

COSCO-PSA Terminal


Second new berth commenced operation

Suez Canal Terminal


Commenced Phase II construction work

Antwerp Terminal



Container fleet capacity: 1.62m TEUs

Ranked as the second largest container leasing company in the world with 13.6% of market share

Raised USD 272m by

– Disposal of 13,509 TEUs of containers for USD 22m in March 2008 and provided container management services for the buyer

– Disposal of 118,094 TEUs of containers for USD 250m by sale-and-leaseback in July 2008. Source：World Cargo News, August 2008

2,050,000

1,621,222

1,500,000

1,060,000

980,000

950,000

780,000

500,000

480,000

460,000

Textainer Group

中遠太平洋 (佛羅倫)

Triton Container

TAL International

Seacastle Container

GE SeaCo

CAI

UES International (HK)

Gold Container

Cronos Group

Top 10 container leasing company in the world

OptimiseOptimise the capital structure of the capital structure of container leasing business by asset light model container leasing business by asset light model

COSCO Pacific (Florens)


Strengthen risk management Strengthen risk management and maintain a healthy financial positionand maintain a healthy financial position

Monitor the potential impact of the global economy and market condition on our operational performance so as to implement a more flexible business strategy to meet challenges ahead

Maintain a healthy financial position:

– Cash on hand: USD 429m

– Net debt to equity: 37.6%

– Interest coverage: 6.2 x

Further strengthen the financial flexibility so as to meet challenges ahead and to provide a solid base for the long term business development


Enhance corporate governanceEnhance corporate governance

Received the Corporate Governance Asia Recognition Award from the Corporate Governance Asia magazine

Recognized as one of the best companies in China in the Corporate Governance Award from The Asset magazine

Awarded the Hong Kong Outstanding Enterprise by the Economic Digest (Hong Kong) magazine

Attaching great importance in enhancing shareholder returns, the Company became a constituent of the Dow Jones Global Select Dividend Index, Dow Jones EPAC Select Dividend Index, and Dow Jones Asia/Pacific Select Dividend 30 Index in November 2008.


Challenging economic and business outlook for 2009Challenging economic and business outlook for 2009

2.1%4.2%

7.2%9.0%

17.8%

-1.9% -3.5%

2.8%6.0%

-20.2%

yoy change

Global GDP Global Containerized Trade China GDPChina

Imports & Exports

2008 2009E 2008 2009E 2008 2009E 2008 2009E 2008 2009E

Global Trade

-4.0pp-4.4pp -3.0pp

-38.0pp

-7.7pp

Sources：Economist Intelligence Unit (March 2009) 、Drewry (4Q2008)

The precipitous decline in trade activity across the globe is consequently damaging the shipping and port related industries. The terminal operators are facing relatively sharp market contraction of which is highly likely to last for the year of 2009.


Confident in long range planningConfident in long range planning

Under this challenging business environment, COSCO Pacific will maintain its

continual development through a series of strategies in 2009, including

strengthening operation management, prevention and management of risks,

cost control and enhancement of efficiency.

Take over Piraeus Container Terminal in Greece on 1 October 2009.

As a top priority, we adhere to our prudent financial strategy to ensure the

safety of our capital and assets.


Bringing fruit to long term stability and profitabilityBringing fruit to long term stability and profitability

2009 is expected to be a year full of challenges. Despite the complex and challenging economic environment, with the support from the parent company and the efforts by our outstanding team, COSCO Pacific will further strengthen the competitiveness of its core businesses, and deliver an even higher quality of services to its customers.

We will continue to adhere to the principle of prudent business management. By implementing stringent measures to control risks and enhancement in management, COSCO Pacific will strengthen its sustainable core competence and continue to steadily develop its business despite the difficult economic environment.

The sharp economic downturn has caused companies to cut back on costs and reduce inventories. However, once the efforts by governments around the world to stimulate the economy start to produce positive effects, demands for goods will increase and the global economy will start to recover.

While it is difficult to predict when the economy will start to recover, COSCO Pacific has formulated its long term development plan and is accumulating momentum for the next development phase.

2008 Final Results2008 Final Results

9 April 2009

2008 Final ResultsChairman’s statementGlobal economic downturn �triggered by the financial tsunami in 4Q2008Stable performance in 2008Dividend payoutFour transformation strategy �leads to a solid profitability of terminal divisionA year with unprecedented challenges in 2009Long range planning Vice Chairman’s report Stable performance of core businesses in 2008Expand the global terminal networkSolid growth of terminal businessSteady performance of terminals in ChinaSatisfactory performance of overseas terminalsOptimise the capital structure of �container leasing business by asset light model Strengthen risk management �and maintain a healthy financial positionEnhance corporate governanceChallenging economic and business outlook for 2009Confident in long range planningBringing fruit to long term stability and profitability2008 Final Results

2008 final results - todayir · 2008 divisional profit contribution breakdown. others 11.7%...

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