COSCO gains new contract; 2 from SembCorp Marine

COSCO Corporation announced that its 51%-owned subsidiary, COSCO Shipyard Group had successfully secured contracts for the lower pontoons of two units of semi-submersible rigs, single to double-hull conversions and four specialized conversions. All these contracts add uo to a total of US$92.4m into COSCO's order books. The deal also includes a $31 million contract that was given by one of the world's largest builder of rigs, SembCorp Marine. The completion date of these projects ranges from Jun 06 to Apr 07.

In the back of falling freight rates, COSCO have still managed to improve profits and earnings by moving into shipbuilding and repair. In addition some of its shipyards in China have also gained small rig-building contracts. With oil reaching US$70 per barrel yesterday, COSCO's move into rig-building and competing with the likes of SembCorp Marine and Keppel Corp will increase earnings. In addition, the heavy volume experienced by the latter two heavyweights have also resulted in some spillover into lower end companies like COSCO and Labroy Marine, both of which are listed in SGX.