COSCO CEO Resigns as Subsidiary Issues Profit Warning

On December 9, the Board of Directors of COSCO Corporation (Singapore) released profit guidance for the fourth quarter and for FY2015, predicting a drop in earnings over the same periods last year.

The company expects a significant net loss due to three factors: the downward pressure on the offshore industry due to low crude prices; a steep drop in orders at the company's shipyards; and what it describes as a “languid” dry bulk market.

Further, COSCO Singapore's shipyards expect writedowns due to order deferments and cancellations. The company will release final results for the fourth quarter in late February.

COSCO Singapore broke even in the second quarter of 2015 but has faced strong headwinds since in the face of weak bulk and container rates. It lost $82 million in the third quarter.

Trading of shares in COSCO Singapore remains suspended while its Chinese state-owned parent company undergoes restructuring. The company is expected to merge with state-owned CSCL in 2016.

Separately, on Wednesday, China COSCO announced the resignation of its CEO, Mr. Jiang Lijun, saying that he has stepped down because he has reached retirement age.

“Mr. Jiang Lijun confirmed that he has no disagreement with the Board, and there is no other matter in relation to his resignation that needs to be brought to the attention of the shareholders of the company,” said China COSCO in a statement.

He will be replaced in the post by Mr. Xu Zunwu effective December 9. Mr. Xu is currently the deputy general manager of China COSCO, among other positions.