CIMC Group Announces 2024 Interim Results

Financial Highlights

RMB million

For the 6 months ended 30 June

2024

2023

Change

24Q2

24Q1

Change

Revenue

79,115

60,574

30.61%

46,672

32,443

43.86%

Operating profit

2,115

1,645

28.60%

1,708

407

319.8%

Net profit

1,395

990

40.85%

1,177

218

440.12%

Net profit attributable tothe Company and other equity holders of the Company

866

399

117.23%

782

835.19%

Net profit attributable to shareholders and other equity holders of the Company after deducting non-recurring profit and loss

820

977

(16.00%)

595

225

164.48%

Results Highlights

1.The container manufacturing business segment maintained a global leading position with significant improvement in results: Benefiting from the increase in the container trade transportation demand and uncertain events such as the Red Sea incident, which led to lower the efficiency of container transportation, the sales volume of dry containers recorded a 425.54% growth year-on-year. In the first half of the year, the revenue of the container manufacturing business was RMB24.95 billion, representing a year-on-year increase of 83%, and net profit increased by 66% to RMB1.276 billion.

2.Significant growth in offshore engineering revenue: Benefiting from the continued recovery of the offshore engineering equipment market, the revenue of this business segment grew significantly by 89% year-on-year to RMB7.78 billion. New orders increased by 20.1% year-over-year to US$1.79 billion, and the accumulated value of orders on hand increased by 20.9% to US$6.18 billion, of which the proportion of oil and gas business, wind power installation vessels, and ro-ro ships was approximately 2:1:1. The net loss continued to narrow by 54% to RMB84 million.

3.Steady operation in two business segments for road transportation, energy, chemical, and liquid food: The vehicle business achieved revenue of RMB10.7 billion and net profit of RMB574 million, with its market share maintaining the number one position domestically; Revenue from CIMC Enric grew 6.7% year-over-year to RMB11.48 billion, and the orders on hand reached a record high of RMB29.35 billion.

HONG KONG, Aug 29, 2024 - (ACN Newswire) - China International Marine Containers (Group) Co., Ltd. (“CIMC Group” or the “Group”, stock code: 000039.SZ/02039.HK) is pleased to announce the unaudited interim results for the six months ended 30 June, 2024 (the “Reporting Period”).

The management of CIMC Group said, “In the first half of 2024, global commodity trade demand rebounded, the container market stabilised and recovered, global energy security and consumer demands increased, and the global shipping and offshore engineering market environment continued to improve. Based on the continuously consolidating foundation of its global operation platforms, we successfully navigated regional risks and achieved stable and high-quality development.In the first half of the year, the Group achieved revenue of 79.1 billion, increased by 30.61% year-over-year, with a gross profit margin maintained at 10.73%. The net profit attributable to the parent company was approximately RMB870 million, which grew substantially 117% year-over-year. During the period, the Group's container industry maintained its global industry-leading position, and its road transportation, vehicles, energy/chemical/liquid food equipment, and offshore engineering businesses also enhanced strong global competitiveness. The Group’s domestic revenue accounted for approximately 45.55% and its overseas revenue accounted for approximately 54.45%, which was flat as compared with the same period last year, maintaining a sound market landscape.”

Segments Results (RMB million)

1H2024 Business indicators

Revenue

As % to the total revenue

Gross profit

As % to the gross profit

Gross profit margin

Net profit

Containers manufacturing

24,950

31.54%

3,043

35.85%

12.20%

1,276

Road transportation vehicles

10,700

13.52%

1,595

18.80%

14.91%

574

Energy, chemical, and liquid food equipment

12,121

15.32%

1,601

18.86%

13.21%

242

Offshore engineering

7,784

9.84%

389

4.58%

4.99%

(84)

Airport facilities and logistics equipment, fire safety and rescue equipment

2,403

3.04%

494

5.82%

20.54%

Logistics services

14,089

17.81%

877

10.34%

6.23%

204

Recycled load

1,197

1.51%

144

1.21%

12.05%

(49)

Main segments above

73,243

92.58%

8,142

95.94%

11.12%

2,200

A review of the main businesses is as follows:

In the logistics field:

In the container manufacturing business, the demand for global goods trade picked up, and uncertain events such as the Red Sea incident led to the detour of European routes, which lowered the efficiency of container transportation, and the demand for containers increased. The production and sales volume of the Group’s container manufacturing business witnessed a significant year-on-year increase. In particular, the accumulated sales volume of dry containers reached 1,382,700 TEUs (same period in 2023: 263,100 TEUs), representing a year-on-year increase of approximately 425.54%. The accumulated sales volume of reefer containers reached 44,700 TEUs (same period in 2023: 51,500 TEUs), representing a year-on-year decrease of approximately 13.2%. During the period, the container manufacturing business of the Group recorded a revenue of RMB24.95 billion (same period in 2023: RMB13.668 billion), representing a year-on-year increase of 82.54%, and a net profit of RMB1.276 billion (same period in 2023: RMB0.768 billion), representing a year-on-year increase of 66.25%. During the period, the Group took decisive action in response to the surging transportation demand in the container transportation market and the issue of lower container turnaround efficiency due to the detours caused by the Red Sea incident, resulting in significant improvements in production efficiency and delivery capabilities, further boosting overall operational efficiency and market competitiveness.

Driven by similar factors, in the logistics services business, both business volume and profitability of most products of the Group recorded considerable year-on-year growth in the first half of the year, with more notable growth in the second quarter as compared to the first quarter. During the period, the logistics services business of the Group realised a revenue of RMB14.089 billion (same period in 2023: RMB9.132 billion), representing a year-on-year increase of 54.28%, and a net profit of RMB204 million (same period in 2023: RMB55 million), representing a year-on-year increase of 274.74%. In the first half of the year, the sea transportation business performed well due to the multiple measures and proactive responses, ranking CIMC Wetrans as TOP 13 on Transprot Topic’s Global Sea Transportation Enterprise List for 2024, the third place among Chinese enterprises.

In the road transportation vehicles business, CIMC Vehicles actively forges new quality productivity, and continues to deepen the “StarLink Project”. During the first half of the year, against the backdrop of the industry bottoming out, it rises to the challenge and breaks through against the trend, its market share has increased, maintaining the number one position domestically. In the specialty vehicles business, CIMC Vehicles continued to consolidate its domestic market and expand into overseas markets, and actively developed integrated new energy products, leading to the small-scale delivery of the industry-first integrated hybrid electric semi-trailer tractor mixer. During the period, CIMC Vehicles achieved revenue of RMB10.7 billion (same period in 2023: RMB13.47 billion), representing a year-on-year decrease of 20.56%; achieved a net profit of RMB574 million.

In the airport facilities and logistics equipment, fire safety and rescue equipment business, CIMC TianDa through integrating production and marketing layouts both at home and abroad, actively promoted integrated operations, thereby reducing overall operating costs and striving to maintain its advantages and keep its long-term stable growth of profitability in a fiercely competitive environment. During the period, the revenue of the business segment grew by 5.31% to RMB2.403 billion, and net profit increased by 364.81% to RMB37 million. In the first half of 2024, the increase in the acceptance and delivery of passenger boarding bridges and fire trucks had driven the increase in the revenue from the airport facilities and logistics equipment, and fire safety and rescue equipment businesses as compared with the same period last year, and total profit of the segment also increased year-on-year. In terms of newly signed orders, the demand in the airport facilities market continued to recover, and the program to issue RMB1 trillion treasure bonds in China boosted the rise in demand for fire safety equipment, owing to which total newly signed orders maintained overall growth.

In the energy industries field:

In the offshore engineering business, in the first half of the year, the international oil prices were at a high level, which stimulated an increase in demand for the oil and gas production platforms, the continuous growth in marine operation activities drove the utilisation ratio of and the rental for offshore engineering equipment to be on the rise, and the offshore engineering equipment market continued to recover. During the period, as new orders for offshore engineering entered the construction period successively, the offshore engineering business of the Group recorded a revenue of RMB7.784 billion (same period in 2023: RMB4.119 billion), representing a year-on-year increase of 88.95% growth. In terms of new orders: the value of effective orders/orders won increased by 20.1% year-on-year to US$1.79 billion (same period in 2023: US$1.49 billion) as of the end of June, including two FPSO and three ro-ro ships. The accumulated value of orders on hand increased by 20.9% to US$6.18 billion (same period in 2023: US$5.11 billion), of which the proportion of oil and gas business, wind power installation vessels, and ro-ro ships was approximately 2:1:1, which had effectively eased the periodic fluctuation of the oil and gas market, demonstrating that successful strategic transformation had been achieved.

In the offshore engineering asset operation business, the Group’s on-lease platforms maintained its high-quality services and occupation rates and continued to provide customers with high-quality and efficient services. Against the backdrop of global energy security and growing consumer demand, the offshore engineering market remained active. The deep-water platform market has benefited from continued investment in development by international oil companies. According to Rystad’s forecast, global capital spending on deepwater oil and gas drilling will increase 10% year-on-year, hitting the highest level in over 10 years. The increase in global demand and the reduction in drilling platform availability are jointly driving the continued growth in day rates and utilisation rates. During the period, Caspian Driller, one of the Group’s jack-up drilling platforms, was granted a 3+2 year contract extension by the customer; and Deepsea Yantai, one of the Group’s mid-deepwater semi-submersible drilling platforms, was granted a contract extension by the customer, and the new leases increased by over 10% in daily rate as compared to the current contracts.

In the energy, chemical, and liquid food equipment business, this segment achieved a revenue of RMB12.121 billion (the same period last year: RMB11.388 billion), representing a 6.43% year-over-year growth, and net profits of RMB242 million (the same period last year: RMB435 million), representing a year-on-year decrease of 44.52%. In which, CIMC Enric registered a revenue of RMB11.48 billion (same period last year: RMB10.76 billion), representing a year-on-year increase of 6.7%, newly signed orders amounted to RMB16.4 billion (the same period last year: RMB12.67 billion), representing a year-on-year increase of 29.5%, orders on hand as of the end of June amounted to RMB29.35 billion (the same period last year: RMB20.6 billion), representing a significant year-on-year increase of 42.5%, reaching a record high. The clean energy segment saw steady revenue growth, with strong demand for LNG storage and transportation equipment, as well as LNG on-vehicle cylinders. The small and medium-sized liquefied gas carriers market remained highly prosperous. In the hydrogen energy field, we successfully acquired the core assets of Beijing Zhonglian Sheng during the period and won the bid for China's largest ammonia, hydrogen, and alcohol tank project. In the chemical and environment segment, its tank container global market share remained number one and demonstrated resilient development. In the liquid food segment, it actively responded to market changes and seized growth opportunities in the domestic liquor market, winning bids for multiple liquor projects.

Outlook and future development

Logistics Segment

In the container manufacturing business, according to CLARKSONS’ forecast in July, the growth of global container trade will significantly increase from 0.7% in 2023 to 5.1% in 2024, and in 2025, the global container trade is expected to see further growth of 2.9%, which suggests an optimistic and stable outlook for the transportation demand in the container transportation market. To cope with the risk of container shortage brought about by these uncertain events, customers’ willingness to spare containers will increase, coupled with the stable replacement rate of old containers, the demand for new containers is expected to be underpinned by the stable fundamentals during 2024–2025.

In the road transportation vehicle business, in the second half of 2024, the demand for logistics and transportation in China will gradually recover, and the semi-trailer industry in China will accelerate its transformation and upgrading towards a new development stage of regularisation, standardisation, intelligence, and electrification. As the U.S. policy trend of interest rate cuts becomes increasingly certain, the demand for semi-trailers in North America may be released; and as the regulation on sustainable development of the European semi-trailer industry becomes stricter and the demand for multimodal transportation grows, the European semi-trailer industry, which is experiencing a slowdown in demand, may be benefited. There is an expected recovery in the specialty vehicle industry, with the penetration rate of new energy specialty vehicles gradually increasing and the regularisation process of specialty vehicle transportation speeding up.

Energy Segment

In the energy, chemicals, and liquid food equipment business, the latest report of Goldman Sachs Group predicts that by 2029, global investment in LNG is expected to increase by more than 50%, and global LNG supply will surge by 80% by 2030. In the domestic market, IEA predicts that by 2030, China’s share in effective LNG contracts will be doubled, increasing from 12% in 2021 to about 25%. As a leading enterprise in advanced intelligent manufacturing of clean energy equipment, driven by the increase in LNG demand, CIMC Enric is expected to continue to benefit from the related storage and transportation equipment and engineering business and will continue to expand business opportunities in overseas markets such as Southeast Asia, Africa, and the Middle East. CIMC Enric will pay attention to the changes and opportunities in the hydrogen energy market, continue to deepen the whole industrial chain layout and integrate solution capability of “preparation, storage, transportation, filling and application. In addition, leveraging its extensive years of experience in production technology and quality management in the tank container manufacturing field and the market share of its medical equipment components business, the Group will be actively monitoring changes in the global liquid food market, and maintaining close attention on emerging opportunities in the domestic liquor and other new industry segments.

In the offshore engineering business, due to the relatively high oil prices continuing to stimulate oil and gas production platforms, the offshore engineering construction market was entering an upward cycle. The FPSO/FLNG market has high short-term demand and ample long-term project reserves. It is anticipated that offshore engineering manufacturers will maintain a high capacity utilisation rate over the next 3–5 years. Leveraging the advantage of the industrial cluster effect, the offshore engineering manufacturers in China are competing for orders with high technical thresholds with those in Japan and South Korea. In the second half of 2024, the Group’s offshore engineering business will continue to actively promote transformation, and integrate the industry mapping. Taking offshore oil and gas as the foundation, the Group will gradually expand to new energy sources to form a business portfolio that dilutes the impacts of the industrial cycle.

Financial and Asset Management Segment

The offshore engineering asset operation and management business of CIMC will continue to capitalise on the active cycle in the offshore engineering market and fully utilise the advantages in the entire industrial chain to advance market development, thereby improving asset rental rates. By focusing on customer needs, the Group will enhance customer satisfaction and explore future cooperation opportunities. Through lean management, the Group will continuously strengthen cost control and core competitiveness, promoting steady growth in profitability.

The Group's management concludes, “In the first half of the year, the Group has consolidated and enhanced its leading industry position in its existing core businesses, while also focusing on expanding multiple strategic emerging businesses. Our core businesses have achieved steady and high-quality growth, and our effective global business layout has also effectively mitigated the impact of recent global market cyclical fluctuations.

Looking ahead to the second half of the year, CIMC will follow the guidance of national policies based on the situation in the new development stage, and will also continue the implementation of the strategic theme of “accelerating the construction of new growth drivers and focusing on promoting high-quality development. We will firmly grasp the important opportunities of new quality productivity, the "Belt and Road" initiative, the unified large market, scientific and technological innovation, and green development. By consolidating and enhancing our leading industry position in our existing core businesses, we will continue to activate new business value and new driving forces, to achieve our goal of high-quality growth."

-Ends-

About China International Marine Containers (Group) Co., Ltd.

The CIMC Group is a world leading equipment and solution provider in logistics and energy industries, and its industry cluster mainly covers logistics and energy fields, strengthening its position as a global market leader. In the logistics field, the Group still adheres to taking container manufacturing business as its core business, based on which to develop road transportation vehicles business, airport facilities and logistics equipment/fire safety and rescue equipment business and to a lesser extent, logistics services business and recycled load business providing products and services in professional field of logistics; in the energy field, the Group is principally engaged in energy/chemical/liquid food equipment business and offshore engineering business; meanwhile, the Group also continuously develops emerging industries and has finance and asset management business that serves the Group itself. As a diversified multinational industrial group that shoulders the mission of global serving, CIMC owns 3 listed companies and over 300 member enterprises in Asia, North America, Europe, Australia and others, and extensive customers and sales networks covering more than 100 countries and regions. During the year, the Group recorded a revenue of RMB127.81 billion, with gross profit margin remained at 13.77% and net profit of RMB 1.863 billion. The Group was ranked 170th in the Fortune 500 China 2023. For more information, please visit http://www.cimc.com/.