Singapore shipyard group Cosco is getting ready to meet an “adverse business environment” in 2009, credit tightens and global trade slows before an expected upturn the following year.

“The International Monetary Fund has forecast that the global expansion will slow to 0.5 percent in 2009 from 3.7 percent in 2008 and this is expected to be the weakest expansion since World War II,” the company said as it delivered financial results this week.

The market outlook for what Cosco does is seen as uncertain, “and it is likely to deteriorate further before it recovers”. Uncertainty is seen causing fewer new shipbuilding and offshore marine engineering contracts this year, seen universally now as a “challenging” year in the making.

The Group posted a 12 percent drop in pre-tax profit for 2008, down to S$451.38 million ($295.9 million). Business was up 54 percent in 2008 and turnover reached S$3.48 billion.

Still, US$7.3 billion in shipbuilding, ship repair and marine engineering contracts are seen tiding the Group over to 2012, or beyond an expected upswing in 2010-2011, when worldwide oil demand is seen once again overtaking supply.

Tags: COSCO Shipyard