Investor
Relations

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year

(i) Income Statement



	Group			Group
	S$'000		%	S$'000		%
	Q3 2003	Q3 2002	Change	YTD 2003	YTD 2002	Change
Turnover	24,361	26,095	(7)	68,215	73,835	(8)
Cost of sales	(14,031)	(19,026)	(26)	(44,375)	(53,573)	(17)
Gross profit	10,330	7,069	46	23,840	20,262	18
Other operating income	498	542	(8)	1,226	2,635	(53)
Distribution costs	(322)	(224)	44	(895)	(725)	23
Administrative expenses	(2,625)	(2,605)	1	(7,733)	(7,234)	7
Other operating expenses	0	0	0	0	(4)	NM
Exceptional items	0	0	0	15	28	(46)
Operating profit	7,881	4,782	65	16,453	14,962	10
Net finance costs	(2,952)	(2,145)	38	(8,050)	(12,526)	(36)
Share of results of associated companies	2,987	1,189	151	9,701	3,761	158
Amortisation of goodwill of an associated company	(145)	(145)	0	(434)	(386)	13
Amortisation of negative goodwill of an associated company	44	0	NM	44	0	NM
Profit before tax	7,815	3,681	112	17,714	5,811	205
Tax	(533)	(540)	(1)	(1,906)	(1,779)	7
Profit from ordinary activities	7,282	3,141	132	15,808	4,032	292
Minority interests	(275)	(369)	(25)	(722)	(912)	(21)
Net profit	7,007	2,772	153	15,086	3,120	384



(ii) Breakdown and Explanatory Notes to Income Statement



	Group			Group
	S$'000		%	S$'000		%
	Q3 2003	Q3 2002	Change	YTD 2003	YTD 2002	Change
Profit before tax is arrived at after (charging)/crediting:
Other income including interest income	520	618	(16)	1,395	2,881	(52)
Interest on borrowings	(2,720)	(3,141)	(13)	(8,421)	(8,842)	(5)
Depreciation and amortisation	(5,995)	(5,650)	6	(17,545)	(17,216)	2
Foreign exchange (loss)/gain	(255)	920	NM	202	(3,929)	NM
Profit on disposal of property, plant and equipment	11	14	(21)	35	28	25
The Group's exceptional items comprise the following:
Profit from disposal of subsidiaries	0	0	0	15	28	(46)
Adjustments for over/(under) provision of tax in respect of prior years:
Income tax	(10)	(6)	67	(291)	(6)	4,750

NOTES:

NM denotes not meaningful.


1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year




	Group		Company
	S$'000		S$'000
	30/09/2003	31/12/2002	30/09/2003	31/12/2002
Current assets
Bank and cash balances	15,840	18,436	1,493	6,598
Fixed deposits with financial institutions	17,661	13,976	0	14
Trade and other receivables [1]	38,411	53,978	1,552	19,779
Short-term investments (net of provision for diminution in value of $351,000 (2002: $351,000)	0	0	0	0
Trading property	630	630	0	0
Completed property	38,661	38,661	0	0
	111,203	125,681	3,045	26,391
Non-current assets
Non-trade debtor	879	882	0	0
Loan to related companies	22,702	22,791	22,702	22,791
Long-term investments [2]	595	7,706	200	200
Associated companies [3]	64,521	28,229	58,212	25,670
Subsidiaries	0	0	193,797	198,113
Investment properties	30,313	30,427	0	0
Property, plant and equipment	361,840	350,773	504	588
Deferred tax assets	494	494	0	0
	481,344	441,302	275,415	247,362
Total assets	592,547	566,983	278,460	273,753
Current liabilities
Trade and other payables [3]	60,337	43,825	15,623	1,333
Bank borrowings	34,124	33,643	3,182	1,747
Other term loans	6,724	6,750	0	0
Loans from immediate holding company [4]	0	6,924	0	6,924
Short-term advance from an associated company	500	500	500	500
Short-term advance from a subsidiary	0	0	0	500
Hire purchase creditors	20	20	0	0
Current tax	851	1,019	0	0
Dividend payable	1,231	188	1,231	188
	103,787	92,869	20,536	11,192
Non-current liabilities
Bank borrowings	170,331	183,123	19,173	45,982
Other term loans	45,383	50,624	0	0
Other long-term creditors and deferred income [5]	4,617	2,473	110	118
Hire purchase creditors	61	77	0	0
Preference shares [6]	476	49,813	476	49,813
Deferred tax liabilities	401	1,108	182	888
	221,269	287,218	19,941	96,801
Total liabilities	325,056	380,087	40,477	107,993
Net assets	267,491	186,896	237,983	165,760
Shareholders' equity
Share capital [7]	179,288	124,945	179,288	124,945
Reserves	26,499	11,025	27,480	11,712
Retained profits	59,200	48,373	31,215	29,103
Interests of shareholders of Cosco Investment (Singapore) Limited	264,987	184,343	237,983	165,760
Minority interests	2,504	2,553	0	0
	267,491	186,896	237,983	165,760


NOTES:

[1] The decrease in Trade and other receivables was due to the repayment of S$18,117,000 by related companies in Q1 2003.

[2] The decrease in Long-term investments was due to the disposal of Revo Technologies Ltd.

[3] The increase in Associated companies was due to the acquisition of 40% interest in Cosco (Dalian) Shipyard Co., Ltd in Q3 2003. The purchase consideration of US$18,125,000 (equivalent to S$31,892,000) was to be satisfied by three instalments. The first and second instalment which amounted to US$10,000,000 (equivalent to S$17,595,000) has been paid on completion of the acquisition. The Company shall pay interest on the outstanding instalment payable of US$8,125,000 (equivalent to $14,038,000) at an interest rate of LIBOR plus 1% per annum. This transaction has resulted in the increase in Trade and other payables of $14,038,000.

[4] The decrease in Loans from immediate holding company was due to the repayment of the loans in Q1 2003.

[5] The increase in Other creditors and deferred income was due to a deferred income received in Q2 2003 relating to a long-term bareboat charter agreement.

[6] The decrease in Preference shares ("RCCPS") was due to the conversion of RCCPS into ordinary shares in Q3 2003.

[7] See 1(d) (ii) for details.


1(b)(ii) Aggregate amount of group's borrowings and debt securities

Amount repayable in one year or less, or on demand



As at 30/09/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
37,686,000	3,682,000	38,667,000	9,171,000



Amount repayable after one year



As at 30/09/2003

As at 31/12/2002

Secured	Unsecured	Secured	Unsecured
211,275,000	4,976,000	231,048,000	52,589,000



Details of any collateral

Secured borrowings are generally secured by the group's leasehold land and buildings, motor vessels, motor vehicles, investment properties and trading properties with net book values totalling $424,404,000 (2002: $413,607,000).


1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year




	Group
	S$'000
	Q3 2003	Q3 2002
Cash flow from operating activities
Profit before tax and share of results of associated companies	4,929	2,637
Adjustments for:
Depreciation of property, plant and equipment	5,957	5,233
Depreciation of investment properties	38	417
Exchange differences	(357)	(563)
Profit on disposal of property, plant and equipment	(11)	(14)
Preference dividend (financing)	299	372
Interest expense (financing)	2,421	2,769
Interest income (investing)	(22)	(76)
Operating cash flow before working capital changes	13,254	10,775
Changes in operating assets and liabilities
Inventories	0	71
Debtors	(2,917)	1,798
Creditors	321	1,904
Cash generated from operations	10,658	14,548
Income tax paid	(298)	(728)
Net cash inflow from operating activities	10,360	13,820
Cash flow from investing activities
Payments for purchase of an associated company	(18,103)	0
Proceeds from disposal of property, plant and equipment	13	30
Payments for purchase of property, plant and equipment	(374)	(7,977)
Purchase of club membership	(117)	0
Dividend income from an associated company	0	51
Interest income	22	57
Net cash outflow from investing activities	(18,559)	(7,839)
Cash flow from financing activities
Increase/(Decrease) in bank loans and other term loans	650	(1,404)
Repayment of hire purchase creditors	(5)	(5)
Increase in loan from immediate holding company	0	6
Proceeds from issue of ordinary shares	1,220	0
Interest expense	(2,258)	(2,315)
Net cash outflow from financing activities	(393)	(3,718)
Net (decrease)/increase in cash and cash equivalents held	(8,592)	2,263
Cash and cash equivalents at the beginning of the financial period	29,742	8,872
Cash and cash equivalents at the end of the financial period	21,150	11,135
Cash and cash equivalents represented by:
Bank and cash balances	15,840	10,174
Fixed deposits with financial institutions	17,661	14,536
Bank overdrafts	(12,351)	(13,575)
	21,150	11,135





1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year




	Share Capital	Reserves	Retained Profit	Total
	S$'000	S$'000	S$'000	S$'000
The Group
Balance at 1 July 2003	144,984	13,694	52,193	210,871
Net loss not recognised in income statement
- Foreign currency translation differences	0	(3,448)	0	(3,448)
Net profit for the financial period	0	0	7,007	7,007
Total recognised (loss)/gain for the financial period	0	(3,448)	7,007	3,559
Issue of share capital	1,168	52	0	1,220
Conversion of RCCPS into ordinary shares	33,136	16,201	0	49,337
Balance at 30 September 2003	179,288	26,499	59,200	264,987
Balance at 1 July 2002	124,945	15,534	44,821	185,300
Net gain not recognised in income statement
- Foreign currency translation differences	0	236	0	236
Net profit for the financial period	0	0	2,772	2,772
Total recognised gains for the financial period	0	236	2,772	3,008
Balance at 30 September 2002	124,945	15,770	47,593	188,308
The Company
Balance at 1 July 2003	144,984	11,227	34,567	190,778
Net loss and total recognised loss for the financial period	0	0	(3,352)	(3,352)
Issue of share capital	1,168	52	0	1,220
Conversion of RCCPS to ordinary shares	33,136	16,201	0	49,337
Balance at 30 September 2003	179,288	27,480	31,215	237,983
Balance at 1 July 2002	124,945	11,712	28,934	165,591
Net loss and total recognised loss for the financial period	0	0	(554)	(554)
Balance at 30 September 2002	124,945	11,712	28,380	165,037




1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares or cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year

During Q3 2003, the issued and paid-up capital of the Company was increased from $144,984,462 to $179,288,532 arising from:-

• the allotment and issue of 165,680,350 ordinary shares of $0.20 each as a result of the conversion of RCCPS (Q3 2002: NIL); and
• the allotment and issue of 5,840,000 ordinary shares of $0.20 each as a result of the exercise of option under the Cosco Group Employees' Share Option Scheme (Q3 2002: NIL)

The outstanding share options under the Cosco Group Employees' Share Option Scheme as at 30 September 2003 was 8,465,000 (30/09/2002: 12,050,000).


2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard)

The figures have not been audited or reviewed.


3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter)

Not Applicable


4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied

The Group has adopted the same accounting policies and method of computation in the financial statements for the current period compared with the audited financial statements for the year ended 31 December 2002.


5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change

Not Applicable


6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends




	Group
	Q3 2003	Q3 2002	YTD 2003	YTD 2002
(i) Based on the weighted average number of ordinary shares on issue	0.89 cents	0.44 cents	2.15 cents	0.51 cents
(ii) On a fully diluted basis	0.89 cents	0.40 cents	2.15 cents	0.51 cents

NOTES:

The earnings per ordinary share is calculated by dividing the consolidated profit after taxation, minority interests and preference dividend by the weighted average number of ordinary shares in issue during the period.

The fully diluted earnings per share is arrived at after taking into consideration the potential ordinary shares arising from the exercise of outstanding share options and RCCPS which would dilute the basic earnings per share. RCCPS have been excluded for YTD 2002 computation as the effect is anti-dilutive.


7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year




	Group		Company
	30/09/2003	31/12/2002	30/09/2003	31/12/2002
Net asset value per ordinary share	29.56 cents	29.51 cents	26.55 cents	26.53 cents

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on

The Group continued to operate under challenging market conditions for the three months ended September 2003. Notwithstanding these difficulties, the growth of Group profitability continued to benefit from continuous restructuring efforts.

Under the restructuring, non-shipping related assets were divested, including two trading companies (Cosco Trading (S) Pte Ltd and Costo (S) Pte Ltd) in January 2002 and properties in Shanghai in December 2002. The expansion of shipping related core businesses included the delivery of two new bulk carriers, the acquisition of a 50% stake in Cosco (Nantong) Shipyard Co., Ltd in February 2002 and the acquisition of a 40% stake in Cosco (Dalian) Shipyard Co., Ltd in August 2003.

Turnover

In Q3 2003, the Group turnover declined by 7% to $24.4 million. Compare to YTD 2002, the Group turnover in YTD 2003 dropped by 8% to $68.2 million. Group turnover for Q3 and for YTD 2003 continued to be affected by restructuring activities. Charter income from shipping continued to grow, but this improvement was negated by the cessation of rental income from Shanghai properties that were sold in December 2002, as well as lower revenue from shipping agency due to the expiry of a one-off vessel chartering arrangement.

Profitability

The restructuring replaced non-shipping related assets with more profitable shipping related core businesses. The expansion of the bulk carrier fleet and higher charter rates have contributed to higher profits from ship chartering. As a result, Group gross profit in Q3 2003 rose by 46% to $10.3 million. Correspondingly, gross margin increased from 27% in Q3 2002 to 42% in Q3 2003.

In Q3 2003, administrative expenses were maintained at $2.6 million while higher distribution costs were incurred due to the expansion of core businesses. Other operating income was marginally lower in Q3, but declined 53% for YTD 2003. This was due to a reduction in the amount recoverable from the immediate holding company pursuant to an option agreement for residential properties held by subsidiary, Cosland (SR) Development Pte Ltd. With higher occupancy and lower interest expense, Cosland (SR) Development Pte Ltd's losses declined, and hence a reduced amount was claimed against the immediate holding company under the option agreement. Group operating profit in Q3 rose by 65% to $7.9 million.

Lower borrowings and a decline in interest rates resulted in the 13% fall in interest expense to $2.7 million. However, foreign exchange swung from a gain of $920,000 in Q3 2002 to a loss of $255,000 in Q3 2003, as a result of the weakening of the United States Dollar against the Singapore Dollar. This had contributed to the increase of 38% in net finance costs.

Contributions from associated companies rose a strong 151% to $3 million in Q3 2003. Contribution from Cosco (Nantong) Shipyard Co., Ltd increased substantially in Q3 2003 against Q3 2002 due to higher shipyard utilisation and better effective cost control. Following the acquisition of a 40% stake in Cosco (Dalian) Shipyard Co., Ltd in August 2003, Cosco (Dalian) Shipyard Co., Ltd made a two month contribution to the Group results in Q3 2003.

With higher shipping charter profits and strong contributions from associated companies, profit before tax increased by 112% to $7.8 million in Q3 2003. The effective tax rate for the quarter declined substantially as the higher shipping profits are tax exempt, Cosco (Dalian) Shipyard Co., Ltd is in a tax-free period and Cosco (Nantong) Shipyard Co., Ltd is enjoying a concessionary tax rate. Group net profit for Q3 2003 and YTD 2003 rose by a significant 153% and 384% to $7 million and $15.1 million respectively.


9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results

The Group's results for Q3 2003 and YTD 2003 are in line with the commentary made in paragraph 10 of the Group's Second Quarter and Half-Year Financial Statement released on 27 August 2003.


10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months

The external business environment is expected to remain challenging for the Group in Q4 2003. Notwithstanding this, the Group remains optimistic about prospects for its core shipping and shipping-related businesses.

Shipping charter income will continue to grow in Q4 2003. The firmer Baltic Freight Index (BFI) this year has enabled the group to renew all 14 charter agreements in 2003 at higher rates, and this will have a favourable impact on charter income in Q4 2003 and 2004.

Contribution from associated companies will remain strong. The full quarter contribution by Cosco (Dalian) Shipyard Co., Ltd in Q4 2003 will sustain growth in profits from associates.

The Group will continue with its restructuring to shed non-shipping related assets and expand shipping related core activities. Before the end of 2003, the Group intends to exercise the put option to sell Cosland (SR) Development Pte Ltd, owner of 35 units of freehold residential apartments at Shanghai Road in Singapore, to the immediate holding company.

Barring unforeseen circumstances, the Group expects the net profit for FY 2003 to be significantly higher than that achieved in FY 2002.


11. Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? None
(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? None

(c) Date payable

Not Applicable


(d) Books closure date

Not Applicable


12. If no dividend has been declared/recommended, a statement to that effect

The directors do not recommend the payment of interim dividend on the ordinary shares for the current financial period.

The dividend of 5.7 cents per RCCPS par value S$0.01 less 22% Singapore Income Tax has been paid on 17 November 2003 in accordance with the terms of the preference shares.

13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year

Not Applicable


14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments

Not Applicable


15. A breakdown of sales

Not Applicable


16. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year

Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details)



	Latest Full Year ()	Previous Full Year ()
Ordinary
Preference	0	0
Total:

Pursuant to Rule 907 of the Listing Manual, the following interested person transactions were entered into during the financial period:



Name of interested person	Aggregate value of all interested person transactions during the financial period under review (excluding transactions less than $100,000 and transactions conducted under shareholders' mandate pursuant to Rule 920)	Aggregate value of all interested person transactions conducted under shareholders' mandate pursuant to Rule 920 (excluding transactions less than $100,000)
	S$'000	S$'000
		Q3 2003	YTD 2003
Cosco Container Lines	0	3,313	10,159
Cosco Guangzhou	0	0	172
Cosco Qingdao	0	0	179
Cosco Xiamen	0	0	170
Guangzhou Ocean Crew Co.	0	458	1,366
Qingdao Ocean Crew Co.	0	343	1,024
Shanghai Ocean Crew Co.	0	571	1,707
Xing Yuan Pte Ltd	0	353	961
	0	5,038	15,738