COSCO SHIPPING Development Co., Ltd. — Earnings Release 2005

Apr 18, 2006

Listed Company Information

Listed Company Information
CSCL<02866> - Results Announcement China Shipping Container Lines Company Limited announced on 18/04/2006: (stock code: 02866 ) Year end date: 31/12/2005 Currency: RMB Auditors' Report: Unqualified (Audited ) (Audited ) Last Current Corresponding Period Period from 01/01/2005 from 01/01/2004 to 31/12/2005 to 31/12/2004 Note ('000 ) ('000 ) Turnover : 28,374,680 22,363,851 Profit/(Loss) from Operations : 4,730,576 5,201,223 Finance cost : (427,273) (512,495) Share of Profit/(Loss) of Associates : 5,960 5,840 Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : 3,582,782 4,013,622 % Change over Last Period : -10.7 % EPS/(LPS)-Basic (in dollars) : 0.59 0.80 -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 3,582,782 4,013,622 Final Dividend : RMB0.12 RMB0.20 per Share (Specify if with other : N/A N/A options) B/C Dates for Final Dividend : 21/05/2006 to 20/06/2006 bdi. Payable Date : 30/06/2006 B/C Dates for Annual General Meeting : 21/05/2006 to 20/06/2006 bdi. Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks: 1. ACCOUNTING POLICIES The consolidated accounts of the Company have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRS"). The consolidated accounts have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and financial liabilities at fair value through profit or loss, which are carried at fair value. The adoption of new / revised HKFRS In 2005, the Group adopted the new / revised standards and interpretations of HKFRS below, which are relevant to its operations. The 2004 comparatives have been amended as required, in accordance with the relevant requirements. HKAS 1 Presentation of Financial Statements HKAS 2 Inventories HKAS 7 Cash Flow Statements HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors HKAS 10 Events after the Balance Sheet Date HKAS 16 Property, Plant and Equipment HKAS 17 Leases HKAS 21 The Effects of Changes in Foreign Exchange Rates HKAS 23 Borrowing Costs HKAS 24 Related Party Disclosures HKAS 27 Consolidated and Separate Financial Statements HKAS 28 Investments in Associates HKAS 32 Financial instruments: Disclosures and Presentation HKAS 33 Earnings per Share HKAS 36 Impairment of Assets HKAS 38 Intangible Assets HKAS 39 Financial Instruments: Recognition and Measurement HKAS Int 15 Operating Leases - Incentives HKFRS 2 Share - based Payments HKFRS 3 Business Combinations Major effects of adopting new HKFRS are set out as follows: HKAS 16 Property, plant and equipment (i) Vessel repairs and surveys The adoption of HKAS 16 has resulted in a change in the accounting policy relating to the vessel repairs and surveys. Upon acquisition of a vessel, the components of the vessel which are required to be replaced at the next dry-docking are identified and these costs are depreciated over the period to the next estimated dry-docking date. Costs incurred on the subsequent dry-docking of vessels are capitalised and depreciated over the period to the next estimated dry-docking date. When significant dry-docking costs are incurred prior to the expiry of the depreciation period, the remaining costs of the previous dry-docking are written off immediately. In previous years, the components of the vessels which are required to be replaced at the next dry-docking are not separately identified and are depreciated over the estimated useful life of the vessels and dry-docking costs for vessels are charged to the profit and loss account as incurred. This accounting policy has been changed to conform with HKAS 16 and the change has been applied retrospectively. The effect of the changes is summarised below: As at 31 December _________________ 2005 2004 RMB'000 RMB'000 Decrease in opening retained earnings 15,874 7,087 Decrease in fixed assets 25,627 23,693 Decrease in deferred tax liabilities 8,458 7,819 Year ended 31 December _______________________ 2005 2004 RMB'000 RMB'000 Increase in operating cost 1,933 13,115 Decrease in income tax expense 638 4,328 (ii) Residual values of the assets The residual values of assets and their useful lives are reviewed and adjusted if appropriate, at each balance sheet date. During the year, the residual values of fixed assets were reassessed, and accordingly, depreciation charge of fixed assets for the year ended 31 December, 2005 has been calculated based on the revised estimated residual values. This represented a change in accounting estimate and the depreciation charge for the year has been reduced by RMB 111 million. 2. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company RMB 3,582,782,000 (2004: RMB 4,013,622, 000) by the weighted average number of 6,030,000,000 (2004: 5,026,174,863) shares in issue during the year. Diluted earnings per share has not been presented as the Company has no potential dilutive shares during the year. 3. DIVIDENDS Year ended 31 December 2005 2004 RMB'000 RMB'000 Special dividend to ultimate holding company (note (i)) - 480,098 Final, proposed of RMB0.12 (2004: RMB0.2) (note (ii)) - per domestic share 433,200 722,000 - per H share 290,400 484,000 __________ _________ 723,600 1,206,000 __________ _________ 723,600 1,686,098 ======== ========= (i) Special dividend to ultimate holding company In accordance with the "Provisional Regulation relating to Corporate Reorganization of Enterprises and Related Management of State-owned Capital and Financial Treatment", which was issued by the Ministry of Finance of the PRC and became effective from 27 August, 2002, the Company is required to distribute to China Shipping (Group) Company the Company's net profit for the period from 1 November, 2003 (being the first day after the date of the valuation of the assets of the Company) to 2 March, 2004 (being the day immediately prior to the conversion of the Company into a joint stock limited company) (the "Special Period"), determined in accordance with Accounting Standards for Business Enterprises and Accounting Systems for Business Enterprises of the PRC, payable out of the Company's internal resources and/or cash generated from the Company's operating activities (the "Profit Appropriation"). Holders of H Shares are not entitled to participate in the distribution arising from the Profit Appropriation. The Company has engaged BDO Zhong Hua Certified Public Accountants to perform a special audit on the Company's accounts for the Special Period to determine the profit for the Special Period for distribution to China Shipping (Group) Company. According to the audited accounts, the net profit for the Special Period amounted to RMB 480,098,000. (ii) A dividend in respect of 2005 of RMB 0.12 per share, amounting to a total dividend of RMB 723,600,000 was proposed at the Board of Directors' Meeting on 18 April, 2006. These accounts do not reflect this dividend payable.