Results Highlights

• Better-than-expected results in a challenging market: Gross profit grew by 1% to HK$694 million as a result of the revenue increase of some businesses with higher gross profit margins. However, as there were some one-off gains generated in 2012 annual results, together with YOY declines in finance income and the share of profits of joint ventures in 2013, profit attributable to equity holders of the Company dropped by 33% YOY to HK$242 million.

• Healthy cash flow and strong financial position: Net cash inflow generated from operating activities for 2013 was HK$361 million. The Group had net cash of HK$6,268 million as at 31stDecember 2013. The strong financial position supports the Company for future development.

• Stable dividend payout ratio: The Board recommended to pay a final dividend of 3.5 HK cents per share. Together with the interim dividend of 2 HK cents per share, total annual dividends per share amounted to 5.5 HK cents, representing a dividend payout ratio of 34% (2012: 33%).

Business Development Highlights

• In 2013, COSCO International improved its business geographic presence and global service network by completing the acquisition of Hanyuan Technical Service Centre in Germany from COSCO Group. Now, the Company is in discussions with COSCO Americas for a possible acquisition of Yuan Hua Technical & Supply Corporation in the US.

• Jotun COSCO and COSCO Kansai maintained their no.1 leading positions in China marine coatings and container coatings markets for years, and fully propelled the construction of the two new plants in Qingdao and Shanghai respectively in 2013. The construction of Jotun COSCO's plant in Qingdao completed and production will start soon, and COSCO Kansai's plant in Shanghai is scheduled to commence production in 2015.

• Several potential acquisitions in shipping services are under study.

Business Review

• In 2013, the shipping market was still weak, and ship owners adopted strict cost control measures and postponed the new build deliveries. Together with the keen competition in the coatings market and marked decrease in new build vessel deliveries, the Group's various core business segments were adversely affected. As a result, the Group's profit before income tax (PBT -0.30%, news) from shipping services declined by 27% YOY to HK$294 million.

• PBT from the three traditional shipping services for shipowners (i.e. ship trading agency, marine insurance brokerage and supply of marine equipment & spare parts) declined by 12% YOY to HK$167 million, contributing 50% of the Group's total PBT.

• The coatings segment's PBT reached HK$109 million, accounting for 33% of the Group's total PBT and representing a 31% YOY decrease. The decrease was mainly attributable to the reversal of provision for the selling expenses of HK$65 million in 2012 resulted from one-off arrangement of sales discounts with COSCO Kansai's certain customers.

• PBT from marine fuel supply segment was HK$18 million, down 68% as compared with 2012 and accounting for 5% of the total PBT. The decrease was mainly due to the one-off reversal of trade receivables impairment provision of HK$29.65 million in 2012.

Outlook

Mr. Sun Jiakang, Chairman of the Board of COSCO International, commented, "Looking forward, with strong financial strength, experienced professionals and global service network, COSCO International's shipping services will see more opportunities. For existing businesses, we will fully capitalise on the implementation of centralised procurement as well as the advantages of business scale and expertise of COSCO fleet, to secure favorable terms from more manufacturers, therefore developing more customers outside COSCO Group. Meanwhile, we will further promote business transformation and upgrading of shipping service business segments, through utilizing our global business network, offering high quality services and products with core competitiveness. For the new business development, COSCO International will proactively push forward the establishment of global sales and services network and step up effort to seek possible acquisitions of shipping service-related projects inside and outside COSCO Group, and at the same time actively study the possibility of extension of upstream and downstream businesses along the industry value chain of existing shipping services. We will strive to become a global leading one-stop shipping service provider, therefore creating the greatest returns for our shareholders."

Editorial Note

The announcement of 2013 annual results is available on the website of the SEHK (www.hkexnews.hk) and the Company's website (www.coscointl.com). A webcast replay of the 2013 annual results analyst meeting will be available at the Company's website after 10:00pm, 20thMarch 2014.

Company Background

COSCO International Holdings Limited ("COSCO International") is listed on the main board of The Stock Exchange of Hong Kong Limited. Its stock code is 00517. COSCO International is a constituent of Hang Seng Corporate Sustainability Benchmark Index. In recent years, COSCO International has focused its strategic business position on the development of the shipping services business. It aims to become a global leading one-stop shipping services provider, offering professional services to shipowners worldwide. Its core businesses include ship trading agency, marine insurance brokerage, supply of marine equipment and spare parts, production and sale of coatings and trading and supply of marine fuel and related products. The headquarters of COSCO International is in Hong Kong and its businesses network cover China Mainland & Hong Kong, Singapore, Japan, and Germany, etc. COSCO International is a listed company owned by COSCO (Hong Kong) Group Limited, which is a wholly-owned subsidiary of China Ocean Shipping (Group) Company ("COSCO"). COSCO is one of the major multinational conglomerates in the world, which focuses mainly on shipping, logistics, and ship building and repairing businesses as well as other shipping related businesses.