This was mainly due to a one-off inventory write-down related to a discontinued Octabuoy hull and topside module project with a customer, ATP Oil and Gas (UK) Limited, which went under company voluntary arrangement (CVA) in the UK.
Interest expense increased by 15.2% to USD 127.7 million in FY 2014 due to higher bank borrowings deployed to fund shipyard operations, COSCO said.
Overall, net profit attributable to equity holders of the company decreased 31.8% from USD 30.6 million in FY 2013 to USD 20.9 million in FY 2014.
The group’s turnover increased 21.5% to USD 4.3 billion in FY 2014 from USD 3.5 billion in FY 2013 supported by increase in shipyard revenue, the results show.
Turnover from shipyard operations increased 21.9% to USD 4.2 billion in FY 2014 from USD 3.5 billion in FY 2013 on growth in revenue from marine engineering and ship building segments.
The group delivered 8 bulk carriers, 2 livestock carriers, 2 tender barges, 2 pipelay heavy lift vessels, 1 platform supply vessel, 1 wind turbine installation vessel, 1 tender rig, 1 jack-up rig, 1 float-over launch barge and 1 stinger barge in FY 2014.
Turnover from dry bulk shipping and other businesses decreased marginally by 5.6% from USD 55.6 million in FY 2013 to USD 52.5 million in FY 2014 on decreased charter rates.
“Our Group maintains a cautious outlook for 2015. The global offshore market has slowed down significantly. Many oil majors have started to cut expenditure leading to fewer orders 3 for deep water rigs. In addition, a number of offshore rigs and supply vessels delivered in past months have not secured contracts for lease yet. Under such challenging circumstances, new orders have declined. All these developments have taken place against the background of weak global economic conditions which, in the latter half of 2014, were accompanied by steep falls in crude oil prices,” Captain Wu Zi Heng, Vice Chairman and President of the Company said.
As at 31 December 2014, the group’s order book stood at USD 8.4 billion with progressive deliveries up to 2017.
COSCO said that the order book was subject to revision from any new or cancellation of orders that may arise.
New orders received in 2014 include 9 bulk carriers, 8 platform supply vessels, 4 emergency response/rescue/field support vessels, 4 subsea supply vessels, 3 livestock carriers, 1 jack-up rig, 1 accommodation barge, 1 floating accommodation unit and 1 module carrier.
“As the Group continues construction in 2015 on new ship building contracts that were secured in recent years at low contract values due to the slumping shipping market then, the Group expects operating margins on these new shipbuilding projects to continue to be under great pressure notwithstanding improving gains in efficiency and productivity,”COSCO further added.