since the launch of the annual report quarter, A-share companies have continuously accrued large impairment, and their performance has been caught off guard.
On January 21, a number of companies issued impairment announcements. Among them, the impairment amount of only Cosco Shipping Energy Transportation Co.Ltd(600026) , Wens Foodstuff Group Co.Ltd(300498) , China Oilfield Services Limited(601808) , Shanghai Electric Group Company Limited(601727) 4 companies exceeded 10 billion yuan.
Cosco Shipping Energy Transportation Co.Ltd(600026) : the provision for impairment of ship assets is about 4.96 billion yuan
Cosco Shipping Energy Transportation Co.Ltd(600026) is the company with the highest amount of impairment disclosed on January 21. At the end of 2021, Cosco Shipping Energy Transportation Co.Ltd(600026) made impairment provision for 94 of the existing 141 ships, totaling about 4.96 billion yuan.
It is worth mentioning that at the end of Cosco Shipping Energy Transportation Co.Ltd(600026) 2020, a total of about 841 million yuan of asset impairment provision was made for 10 old foreign trade ships with more than 15 years and planned to be disposed of at an appropriate time during the 14th Five Year Plan period.
Under the huge provision, Cosco Shipping Energy Transportation Co.Ltd(600026) is expected to lose 4.92 billion yuan to 5.12 billion yuan in 2021, which may be the largest loss in the history of the company. Cosco Shipping Energy Transportation Co.Ltd(600026) the net profit in the same period of last year was 2.37 billion yuan.
Cosco Shipping Energy Transportation Co.Ltd(600026) said that the continuous downturn of the international oil transportation market in 2021 and the rigid growth of epidemic prevention costs in the post epidemic period have seriously affected the operating performance of the company and its subsidiaries.
As the world’s largest tanker owner, the downturn of the international tanker market in 2021 has been reflected in the company’s previous financial reports, Cosco Shipping Energy Transportation Co.Ltd(600026) the net profit in the first three quarters of 2021 fell by more than 80% year-on-year.
However, the one-time provision for asset impairment of nearly 5 billion yuan led to a significant loss in the company’s performance, which still surprised the market. The Shanghai Stock Exchange issued an inquiry letter on the same day, requiring supplementary disclosure of the specific process, selection of main parameters and basis of asset impairment calculation, demonstrating whether there is a significant deviation in the evaluation, the reason and rationality of withdrawing large impairment during the reporting period, and whether the withdrawn amount is accurate and appropriate.
for the calculation basis of asset impairment, the announcement shows that there are two factors. One is that the international authority lowered the forecast of the rent level of the tanker transportation market.
Cosco Shipping Energy Transportation Co.Ltd(600026) said that Drury, the shipping authority, significantly lowered the forecast of the spot market daily income level of the international tanker transportation market in the future. Drury’s prediction of the daily income level of the spot market of oil tanker transportation is an important input parameter of the group’s ship asset impairment test model at the end of each year. According to the principle of consistency, the group will continue to take it as the impairment test parameter in 2021, which is the most important factor affecting the significant impairment results of the group’s ship assets in 2021.
The announcement also shows that in 2021, the average daily revenue of the Middle East China route market of the company’s VLCC was – 518 US dollars / day, a year-on-year drop of 48697 US dollars / day, a decrease of 101%. The daily rent level was in the negative range for 56% of the year in 2021.
Second, the impact of IMO’s “carbon emission reduction” policy. When conducting the ship impairment test in 2021, the group considered the impact of the new deal of “carbon emission reduction” of the International Maritime Organization in 2021 on the investment in ship technical transformation and operation efficiency.
China Oilfield Services Limited(601808) provision for impairment for two consecutive years
The performance of China Oilfield Services Limited(601808) in the third quarter of 2021, which has just improved month on month, also fell sharply due to the provision of large impairment net profit.
It was announced on January 21 that the net profit in 2021 is expected to decrease by 2.35-2.47 billion yuan, a year-on-year decrease of 87% – 91%. The net profit of the company in the same period last year was 2.7 billion yuan.
China Oilfield Services Limited(601808) said that during the reporting period, under the influence of the global New Coronavirus pneumonia epidemic, the international oil and gas industry fluctuations and the accelerated transformation of the energy industry, the international oil companies are still cautious about investment in oil and gas exploration and development. The operating price and utilization rate of some large equipment of the company are low, showing signs of impairment. It is estimated that the impairment loss of fixed assets will be about 2.01 billion yuan in 2021.
The reporter noted that the China Oilfield Services Limited(601808) 2020 annual report also has the action of withdrawing large asset impairment.
In 2020, the company made provision for asset impairment of more than 600 million yuan. At that time, it was announced that due to the impact of the global outbreak of the epidemic on the demand for crude oil, the international crude oil price fluctuated at a low level throughout the year, the recovery of the international oilfield service market was slow, the utilization rate and operating price of the company’s large equipment had not returned to the normal level, and some fixed assets showed signs of impairment.
in addition, Wens Foodstuff Group Co.Ltd(300498) , Shanghai Electric Group Company Limited(601727) and other companies announced large impairment on the same day. Among them, Wens Foodstuff Group Co.Ltd(300498) is expected to have a loss of 13-13.8 billion yuan in 2021 and a profit of 7.426 billion yuan in the same period of last year. During the reporting period, the company amortized equity incentive expenses of about 500 million yuan, and preliminarily accrued impairment reserves of about 2.5 billion yuan for the current inventory of consumptive biological assets and productive biological assets.
Shanghai Electric Group Company Limited(601727) it was announced that Chongqing Shenhua, a joint-stock enterprise holding 20% equity, had withdrawn an asset impairment provision of RMB 1.418 billion, and the company is expected to recognize an investment loss of RMB 232 million on Chongqing Shenhua’s long-term equity investment. Chongqing Shenhua was established based on the industrialization project of copper indium gallium selenium Cecep Solar Energy Co.Ltd(000591) battery module. Later, due to changes in photovoltaic industry and other factors, the competitiveness of products using copper indium gallium selenium technology decreased. Therefore, Chongqing Shenhua decided to postpone the construction of the project and has not been put into operation so far.
