Cosco International, the shipping services subsidiary of the mainland's largest shipping company, might complete the purchase of marine fuels company China Marine Bunker (PetroChina) from parent Cosco by the end of this year.
This emerged after financial controller Tony Lo Siu-leung said Cosco International planned to make a potential HK$3 billion investment in its shipping services operation this year.
While Cosco International has never formally named Chimbusco as the target, the firm's chairman Zhang Fusheng said yesterday it was exploring the possible acquisition of a marine bunker supplier from Cosco. Chimbusco, a 50-50 joint venture between Cosco Group and PetroChina, is the only bunker oil supplier controlled by the parent company.
Confirmation of the planned investment came after Cosco International saw net profit rise 50 per cent to HK$1.27 billion last year. This followed a one-off gain of HK$545.7 million from the sale of its 16.85 per cent stake in Sino-Ocean Land Holdings in December. Underlying net profit rose 18 per cent to HK$287 million from HK$244 million.
But despite a special dividend of 35 HK cents per share from the proceeds of Sino-Ocean, together with a full-year dividend of 3 HK cents, the company saw its share price drop 6.5 per cent to close at HK$5.02 yesterday.
Revenue surged 432 per cent to HK$8.67 billion following a full-year contribution of HK$5.95 billion from its Singapore-based marine fuels subsidiary, Sinfeng Marine Services, which was formed in November 2009. Managing director Wang Xiaodong said the 2009 results included just one month's revenue from the marine fuels business, which amounted to only HK$45.6 million.
Wang said there was significant growth in the firm's marine fuels business - 'actually we have only 4 per cent of the market in Singapore', equivalent to last year's sales of 1.62 million tonnes.
He pointed out that global marine fuel sales topped about 400 million tonnes while Singapore accounted for 40 million tonnes of the total. 'In the future, there is very big room for development,' Wang added.
Lo said revenue from the firm's marine and container paints division climbed 223 per cent to HK$1.29 billion last year from HK$400 million a year earlier. This reflected the collapse in the container shipping market in 2009, when box manufacturing virtually stopped.
There was also double-digit growth from the marine insurance and marine equipment businesses.