COSCO SHIPPING International (Singapore) Addresses SGX RegCo Queries on Audited Full-Year Results

COSCO SHIPPING International (Singapore) Co., Ltd. has issued a formal response to queries from Singapore Exchange Regulation (SGX RegCo) regarding material variances between its preliminary full-year financial results and its audited financial statements for the year ended 31 December 2025.

Key Points from the Report

• Material Variances Identified:
  The company disclosed differences in three key cash flow areas after its auditors completed the final audit:
  • Net cash from operating activities: Decreased from \$57,163,000 (preliminary) to \$52,624,000 (audited), a reduction of \$4,539,000.
  • Net cash used in investing activities: Improved from (\$16,749,000) (preliminary) to (\$11,557,000) (audited), a positive variance of \$5,192,000.
  • Net cash from financing activities: Slightly decreased from \$91,388,000 (preliminary) to \$90,735,000 (audited), a difference of \$653,000.
• Nature of Adjustments: All adjustments are reclassifications between cash flow categories and removal of non-cash items. There is no impact on profit or loss, total cash and cash equivalents, or net asset position.
• Compliance with Listing Rules: The company affirms compliance with SGX Listing Rule 704(6), which mandates immediate disclosure of material adjustments to preliminary results after audit.

Detailed Explanations for Shareholders and Investors

1. Variance in Net Cash from Operating Activities (\$4.54 million decrease):

• The key adjustments relate to:
  • Unrealised exchange differences: Previously included \$699,000, restated to \$46,000. The \$653,000 difference was due to dividends declared by subsidiaries to minority shareholders, previously misclassified.
  • Trade and other payables: Restated from \$14,308,000 to \$9,116,000, a \$5,192,000 reduction. This was due to unpaid construction costs initially included under operating cash flow, now properly reclassified.

2. Variance in Net Cash Used in Investing Activities (\$5.19 million improvement):

• The improvement stems from:
  • Additions to property, plant, and equipment: Originally included \$24,571,000, now restated to \$19,379,000. The \$5,192,000 difference represents unpaid construction costs, which are non-cash and were correctly excluded after audit.

3. Variance in Net Cash from Financing Activities (\$653,000 decrease):

• The change is due to:
  • Dividend paid to non-controlling interests of a subsidiary: \$654,000 was reclassified from unrealised exchange differences (operating) to financing activities for proper accounting.

Implications for Shareholders

• No Impact on Group’s Financial Health: Despite the variances, the adjustments are purely presentational and do not affect the Group’s profitability, total cash, or net assets.
• Accurate Financial Reporting: The reclassifications enhance the accuracy and transparency of the company’s financial reporting, which is critical for investor confidence.
• Regulatory Compliance: The company’s swift response and compliance with SGX Listing Rules demonstrate a strong commitment to corporate governance and transparency.
• Potential Share Price Impact: While these adjustments are non-cash and have no effect on actual financial performance, awareness of proper categorisation and compliance may reassure investors but is unlikely to trigger significant share price movement.

Conclusion

COSCO SHIPPING International (Singapore) has clarified the reasons for variances between its preliminary and audited cash flow statements. All adjustments are non-cash and relate to the proper classification of items between operating, investing, and financing activities. There is no impact on the Group’s underlying financial health or profitability. The company has affirmed its compliance with relevant SGX rules, reinforcing its commitment to robust financial practices.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors are advised to conduct their own due diligence and consult their financial advisors before making any investment decisions.

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