Company to Report Significant Profit Decline Linked to Investment Impairment
Cosco Shipping International (Singapore) has warned that it expects to report a net loss for the financial year ending 31st December 2022, with a significant decline in profits compared to FY2021. The expected loss is primarily due to a non-cash impairment of goodwill associated with its investment in Cogent Holdings.
In a profit guidance issued on Wednesday (15th February), Cosco explained that the impairment stemmed from its 2018 acquisition of Cogent for S$490 million, during which it recognised goodwill amounting to S$99 million. The company conducted its annual impairment assessment and determined that the goodwill required an impairment of S$99 million.
Cosco, which is controlled by the Chinese state-owned enterprise China Cosco Shipping Corporation, is expected to announce its full financial results by 1st March 2023.
Following the profit warning, shares of Cosco Shipping closed 1% lower at S$0.193 on Wednesday, prior to the official announcement.
