Cosco Corp widens losses to $313m in Q4

Blame it on provisions for inventory write-downs.

Singapore-listed shipbuilder Cosco Corporation posted a net loss of $313m in 4Q16, expanding from a loss of $102m a quarter ago.

According to DBS Vickers Securities this is mainly due to a huge provision of $276m made for inventory write-downs. However, the loss was partially mitigated by a $65m reversal of bad debt.

This dragged full-year results to a $466.5m loss.

Meanwhile, DBS noted that Cosco Corp's gross order book stood at US$6.4b by end-2016.

"Cosco has received a number of deferment and order cancellation requests. The risks remain prevalent. Several fabrication contracts worth US$1.3b for modules of drillships and FPSOs with certain Brazilian customers are deemed to be more at risk given the current situation in Brazil," the brokerage firm said.