Cosco’s US$220m contract no biggie, says analyst

The beleaguered shipmaker will barely earn anything from its contract for two offshore construction vessels from SapuraCrest.

CIMB, which has already penciled in the new deal in its FY12 order target of US$1.5b for Cosco, said in a statement that it remains “unmoved” by the contract due to its low profitability. 

CIMB sees the project to yield marginal profit for Cosco since SapuraCrest was reportedly the most aggressive bidder for the Petrobras tender.

The analyst, which has projected more provisions for project losses in the next 12 months as Cosco executes more offshore projects, added that the shipbuilder “could have bid competitively to fill up its shipbuilding order book.” 

Cosco did not immediately identify SapuraCrest as its client when it received letters of award in September 2011. 

CIMB, however, named the client as SapuraCrest afterwards following reports that the Asian company bagged a trio of pipe-laying vessel construction and charter contracts from Petrobras for US$1.4b.

The Technip and Odebrecht consortium was awarded two, while Subsea 7 clinched the remainder of Petrobras’s six pipelay tender.

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Tags: CIMB, Cosco, SapuraCrest