In 2017, COSCO SHIPPING Ports has been focusing on the development of terminals business. During the year, it completed the acquisition of a 51% equity interest in Noatum Port Holdings S.L. in Spain, including its two container terminals and two railway companies (collectively the “NPH Group”), the acquisition of additional equity interest in APM Terminals Zeebrugge NV (now known as CSP Zeebrugge Terminals NV) (“Zeebrugge Terminal”) in Belgium, which became a wholly-owned subsidiary of the Company, the acquisition of a 51% equity interest in Nantong Tonghai Port Co., Ltd. (“Nantong Terminal”) and a 70% equity interest in Wuhan Yangluo Jiutong Port Services Limited (now known as CSP Wuhan Company Ltd.) (“Wuhan Yangluo Terminal”) and the integration project of Dalian Container Terminal Co., Ltd. (“DCT”), where DCT completed the merger with Dalian Port Container Terminal Co., Ltd. (“DPCT”) and Dalian International Container Terminal Co., Ltd. (“DICT”) in October 2017, and COSCO SHIPPING Ports completed the strategic disposal of its equity interests in DPCT and DICT. Additionally, in 2017, the Group subscribed for the non-circulating domestic shares in QPI and disposed its shares in Qingdao Qianwan Terminal. Accordingly, (1) a gain after tax of US$244,596,000 from the disposal of Qingdao Qianwan Terminal; (2) reversal of dividend withholding income tax provision in the amount of US$11,970,000 made in prior years in respect of the profit retained by Qingdao Qianwan Terminal; and (3) a gain after tax of US$28,826,000 on remeasurement of previously held interests of QPI at fair value upon further acquisition of equity interests to become an associate (collectively the “Exceptional Items”) were recorded during the year. In 2017, the Group recorded profit after tax from one-off Exceptional Items totalling US$285,392,000. During the year, profit attributable to equity holders of the Company amounted to US$512,454,000 (2016: US$247,031,000), representing a considerable increase of 107.4% compared with last year. Excluding profit after tax from one-off Exceptional Items in 2017 and profit in relation to discontinued container leasing, management and sale businesses in 2016, the Company recorded profit attributable to equity holders in the amount of US$227,062,000 for 2017 (2016: US$180,937,000), a 25.5% increase compared with last year.

The Group has achieved a total throughput of 100,202,185 TEU in 2017, total equity throughput was 31,999,491 TEU. Excluding the throughput of QPI and Qingdao Qianwan Terminal, the Group recorded a throughput of container terminals of 87,932,185 TEU (2016: 77,572,219 TEU), a 13.4% increase compared with last year, and a throughput of bulk cargo of 80,810,524 tons (2016: 80,821,924 tons), similar to the 2016 level. The equity throughput of containers was 29,740,584 TEU (2016: 26,798,320 TEU), increased by 11.0% compared with last year. The equity throughput of bulk cargo amounted to 27,456,600 tons (2016: 27,049,465 tons), increased by 1.5% compared with last year. Excluding Exceptional Items, the Group recorded a profit from the terminals business of US$299,866,000 during 2017 (2016: US$242,898,000), a 23.4% increase compared with last year. Of this, profit from terminal companies in which the Group has controlling stakes was US$58,037,000 (2016: US$59,048,000), a 1.7% decrease compared with last year; profit from non-controlling terminals was US$241,829,000 (2016: US$183,850,000), a 31.5% increase compared with last year.

Profit from terminal companies in which the Group has controlling stakes was mainly attributable to Piraeus Container Terminal S.A. (“Piraeus Terminal”) in Greece and Guangzhou South China Oceangate Container Terminal Company Limited (“Guangzhou South China Oceangate Terminal”). In 2017, the throughput of Piraeus Terminal grew to 3,691,815 TEU (2016: 3,470,981 TEU), a 6.4% increase compared with last year. However, owing to the increased operational costs resulting from raised concession rates, completion of construction of the eastern part of Pier 3 of Piraeus Terminal, as well as the commencement of operation of the phase I of western part of Pier 3 of Piraeus Terminal in August 2016, which led to higher depreciation and interest expenses over last year. In 2017, profit of Piraeus Terminal amounted to US$20,000,000 (2016: US$31,357,000), a 36.2% decrease compared with last year.

In 2017, the throughput of Guangzhou South China Oceangate Terminal grew to 5,056,257 TEU (2016: 4,781,665 TEU)), a 5.7% increase compared with last year. During the year, with the decreased loss from currency exchange, Guangzhou South China Oceangate Terminal recorded a profit of US$15,210,000 (2016: US$12,345,000), a 23.2% increase compared with last year. Xiamen Ocean Gate Container Terminal Co., Ltd. (“Xiamen Ocean Gate Terminal”) and Jinzhou New Age Container Terminal Co., Ltd. (“Jinzhou New Age Terminal”) both recorded positive performance. After the OCEAN Alliance called at Xiamen Ocean Gate Terminal in April 2017, it newly added 9 shipping routes; its container throughput grew to 1,501,001 TEU (2016: 1,131,197 TEU); its bulk cargo throughput also grew to 2,417,850 tons (2016: 1,739,319 tons); it recorded a profit for 2017 of US$4,214,000 (2016: US$1,297,000), an increase of 224.9% compared with last year. In 2017, the throughput of Jinzhou New Age Terminal grew to 571,113 TEU (2016: 449,016 TEU), a 27.2% increase compared with last year; its profit also increased to US$2,547,000 (2016: US$574,000), a 343.7% increase compared with last year.

In respect of non-controlling terminals, profit from non-controlling terminals for 2017 was US$241,829,000 (2016: US$183,850,000), a 31.5% increase compared with last year. In May 2017, COSCO SHIPPING Ports completed the subscription of shares in QPI, and started to account for its share of profit of QPI using the equity method for May to December, which amounted to US$53,524,000 during the year. A profit of Qingdao Qianwan Terminal in the amount of US$48,089,000 was included into 2016. In addition, the allowances for impairment loss for Qinghuangdao Port Co., Ltd. (“Qinghuangdao Port”) amounted to US$19,800,000 for 2016 (no such item in 2017). Excluding the share of profit of QPI for 2017 and the share of profit of Qingdao Qianwan Terminal and the allowances for impairment loss of Qinghuangdao Port for 2016, profit from non-controlling terminals for 2017 was 188,305,000 (2016: US$155,561,000), a 21.0% increase compared with last year.

Financial Analysis
Revenues
Revenues of the Group for 2017 amounted to US$634,710,000 (2016: US$556,377,000), a 14.1% increase compared with last year. In 2017, the Group completed the acquisition of NPH Group and increased its equity interest in Zeebrugge Terminal, which were included in the Group’s revenues since November and December 2017, respectively. In 2017, the NPH Group recorded revenue of US$44,596,000 in November and December, while the revenue for Zeebrugge Terminal in December amounted to US$1,283,000. During the year, while the throughput of Piraeus Terminal increased 6.4% to 3,691,815 TEU (2016: 3,470,981 TEU) compared with last year, the growth of its revenue, however, narrowed, due to a decrease in the handling volume of local import and export loaded containers with higher charges compared with last year. In 2017, Piraeus Terminal recorded revenue of US$183,219,000 (2016: US$176,226,000), a 4.0% increase compared with last year. Guangzhou South China Oceangate Terminal recorded a throughput of 5,056,257 TEU for 2017 (2016: 4,781,665 TEU), a 5.7% increase compared with last year, and recorded a revenue of US$151,758,000 (2016: US$151,629,000), similar to the 2016 level. Xiamen Ocean Gate Terminal and Jinzhou New Age Terminal both recorded strong performance in 2017. Compared with last year, the container and bulk cargo throughputs of Xiamen Ocean Gate Terminal grew 32.7% and 39.0% respectively, and its revenue increased 34.4% to US$63,490,000 (2016: US$47,228,000) compared with last year. Jinzhou New Age Terminal also reported a growth of 27.2% in its container throughput, while its revenue increased to US$20,644,000 (2016: US$14,886,000), a 38.7% increase compared with last year.

Cost of sales
Cost of sales mainly comprised operating expenses of the terminal companies in which the Group has controlling stakes. Cost of sales for 2017 was US$425,435,000 (2016: US$357,294,000), a 19.1% increase compared with last year. The increase was mainly attributable to the NPH Group and Zeebrugge Terminal newly added in 2017, of which cost of sales amounted to US$35,574,000 and US$1,235,000 respectively, as well as from Piraeus Terminal and Xiamen Ocean Gate Terminal. Due to higher depreciation, amortisation and outsourced stevedoring expenses compared with last year, the cost of sales of Piraeus Terminal increased to US$140,784,000 (2016: US$117,772,000), a 19.5% increase compared with last year. Growths in container and bulk cargo throughputs also drove the increase in the cost of sales of Xiamen Ocean Gate Terminal to US$43,357,000 (2016: US$32,324,000), a 34.1% increase compared with last year

Administrative expenses
Administrative expenses in 2017 were US$114,290,000 (2016: US$84,871,000), a 34.7% increase compared with last year. The increase was mainly attributable to the increased number of projects and increases in the professional service fees and provisions in 2017 as compared with last year. In addition, the completion of the acquisition of NPH Group, the increase in equity interest in Zeebrugge Terminal, the establishment of CSP Abu Dhabi Terminal L.L.C. (“Khalifa Terminal Phase II”), and the acquisition of equity interests in Nantong Terminal and Wuhan Yangluo Terminal contributed to the administrative expenses for 2017.

Other operating income/(expenses), (net)
Net other operating income in 2017 was US$35,218,000 (2016: net other operating expenses of US$19,572,000), which included the integrated profit before taxation of DCT at US$7,301,000 and the profit before taxation of the increased equity interest in Zeebrugge Terminal at US$30,000. For 2016, it included the provision for impairment loss made for an available-for-sale financial asset (i.e. Qinhuangdao Port) of US$19,800,000 and no such provision was made in 2017. Moreover, an exchange gain of US$15,681,000 was recorded in 2017 (2016: exchange loss of US$9,097,000).

Finance costs
The Group’s finance costs for 2017 was US$55,976,000 (2016: US$52,142,000) a 7.4% increase compared with last year. The average balance of bank loans increased to US$1,691,875,000 (2016: US$1,528,991,000), a 10.7% increase compared with last year. The increase in finance costs was mainly attributable to the bank loan interest of the terminals newly added by the Group in 2017. Taking into account the capitalised interest, the average cost of bank borrowings in 2017, including the amortisation of transaction costs over bank loans and notes, was 3.22% (2016: 3.37%).

Share of profits less losses of joint ventures and associates
The Group’s share of profits less losses of joint ventures and associates for 2017 amounted to US$236,568,000 (2016: US$200,242,000), a 18.1% increase compared with last year. This included the share of profit of QPI for May to December 2017, which amounted to US$53,524,000, while the profit of Qingdao Qianwan Terminal for 2016, which amounted to US$48,089,000, was included in the profit for 2016. Excluding the share of profit of QPI in 2017 and the profit of Qingdao Qianwan Terminal for 2016, the Group’s share of profits less losses of joint ventures and associates for 2017 amounted to US$183,044,000 (2016: US$152,153,000), a 20.3% increase compared with last year.

In 2017, the throughput of Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret A. Ş. (“Kumport Terminal”) in Turkey increased to 1,063,335 TEU (2016: 665,398 TEU), a considerable increase of 59.8% compared with last year, which was mainly attributable to the increase in the throughput from the new customer, namely THE Alliance, since April 2017. This, coupled with the decrease in operating costs resulting from the depreciation of the Turkish Lira, drove the growth in profit. In 2017, the share of profit of Kumport Terminal saw a remarkable increase to US$12,673,000 (2016: US$2,432,000). In 2017, Euromax Terminal Rotterdam B.V. (“Euromax Terminal”) in the Netherlands achieved a turnaround from loss to profit, with its throughput increased to 2,693,337 TEU (2016: 653,808 TEU) and the share of its profit increased to US$2,752,000 (2016: a loss of US$266,000). COSCO-HIT Terminals (Hong Kong) Limited (“COSCO-HIT Terminal”), Asia Container Terminals Limited (“Asia Container Terminal”) and Hongkong International Terminals Limited (“Hongkong International Terminal”), a subsidiary of Hutchison Port Holdings Trust, commenced their co-management and operation on 1 January 2017. Subsequently, the combined throughput of COSCO-HIT Terminal and Asia Container Terminal for 2017 grew to 3,488,895 TEU (2016: 2,432,750 TEU), a 43.4% increase compared with last year. Share of profit of COSCO-HIT Terminal and Asia Container Terminal increased to US$15,133,000 in total (2016: US$13,161,000), a 15.0% increase compared with last year. Profit of DPCT for 2017 amounted to US$2,595,000 (2016: US$1,321,000), a 96.4% increase compared with last year, which was mainly attributable to the additional rental income of DPCT from #15 berth in 2017, which drove growth in the overall profit of DPCT. DICT, another terminal located in Dalian, delivered satisfactory profit in 2017, recorded a profit of US$2,102,000 in the year (2016: US$1,239,000), a 69.7% increase compared with last year. In 2017, the throughput of Shanghai Pudong International Container Terminals Limited (“Shanghai Pudong Terminal”) delivered a growth of 3.7% compared with last year, while the share of the profit of Shanghai Pudong Terminal increased to US$22,949,000 (2016: US$20,607,000), a 11.4% increase compared with last year. The throughput of Ningbo Yuan Dong Terminals Limited (“Ningbo Yuan Dong Terminal”) for 2017 amounted to 2,980,839 TEU (2016: 2,536,182 TEU), a 17.5% increase compared with last year; the share of the profit of Ningbo Yuan Dong Terminal increased to US$9,001,000 (2016: US$7,459,000), a 20.7% increase compared with last year.

Income tax expenses
Income tax expenses amounted to US$94,709,000 (2016: US$48,170,000), a 96.6% increase compared with last year. This included taxation related to Exceptional Items, including capital gain tax of US$39,365,000 in respect of the disposal of Qingdao Qianwan Terminal, deferred income tax of US$9,608,000 arising from the remeasurement gain of previously held interests of QPI at fair value upon further acquisition of equity interests to become an associate, as well as the reversal of dividend withholding income tax provision in the amount of US$11,970,000 made in prior years in respect of the profit retained by Qingdao Qianwan Terminal. Net taxation related to Exceptional Items totaled US$37,003,000. In addition, the income tax expenses for 2017 also include the deferred income tax of US$2,757,000 generated by the integration of DCT. Excluding taxation related to Exceptional Items and the deferred income tax generated by the integration of DCT, income tax expenses for 2017 amounted to US$54,949,000 (2016: US$48,170,000), a 14.1% increase compared with the last year.

Financial Position
Cash flow
In 2017, the Group continued to receive steady cash flow income. The Group’s net cash generated from operating activities amounted to US$252,900,000 (2016: US$300,759,000). In 2017, the Group borrowed bank loans of US$704,024,000 (2016: US$1,401,356,000) and repaid loans of US$308,143,000 (2016: US$1,147,394,000).

In 2017, an amount of US$198,483,000 (2016: US$440,681,000) was paid in cash by the Group for the expansion of berths and the purchase of property, machines and equipment, of which US$277,447,000 in 2016 was for the purchase of containers, while no container was purchased in 2017 following the disposal of FCHL. In addition, the subscription of 1,015,520,000 non-circulating domestic shares in QPI at a total consideration of RMB5,798,619,200 (equivalent to US$843,858,000, being RMB5.71 per share) was completed during the year, of which RMB3,198,650,840 (equivalent to US$465,491,000) was settled by the transfer of a 20% equity interest in Qingdao Qianwan Terminal to QPI, and the remaining RMB2,599,968,360 (equivalent to US$378,367,000) was settled in cash. Moreover, in 2017, the Group completed the acquisition of a 51% equity interest in the NPH Group for US$218,035,000, the increase of equity interest in Zeebrugge Terminal and provision of shareholder’s loan totalled at US$40,212,000, and the acquisition of Wuhan Yangluo Terminal for US$45,521,000. Furthermore, the acquisition of a 40% equity interest in Reefer Terminal S.p.A. (“Vado Reefer Terminal”) was completed in 2017, in connection with which an amount of US$7,465,000 was invested, and an additional shareholders’ loan of US$37,061,000 was provided to Vado Terminal. Additionally, the Group increased its investment in Qingdao Port Dongjiakou Ore Terminal Co., Ltd. for an amount of US$22,601,000 during the year.

In 2016, the Company completed its acquisition of all the issued shares in China Shipping Ports Development Co., Limited and paid the consideration of US$1,161,963,000. In addition, the Company also completed the disposal of all the issued shares in FCHL in 2016, for which it received a disposal consideration of US$1,508,725,000, including the consideration for the assignment of the FCHL shareholder’s loans in the aggregate sum of US$285,000,000.

Financing and credit facilities
As at 31 December 2017, the Group’s total outstanding borrowings amounted to US$2,334,349,000 (31 December 2016: US$1,502,991,000) and cash balance amounted to US$566,400,000 (31 December 2016: US$837,100,000). Banking facilities available but unused amounted to US$976,365,000 (31 December 2016: US$266,874,000).

Assets and liabilities
As at 31 December 2017, the Group’s total assets and total liabilities were US$8,954,080,000 (31 December 2016: US$6,786,456,000) and US$3,108,706,000 (31 December 2016: US$2,020,652,000) respectively. Net assets were US$5,845,374,000, a 22.7% increase as compared with that of US$4,765,804,000 as at 31 December 2016. Net current liabilities as at 31 December 2017 amounted to US$179,637,000 (31 December 2016: net current assets of US$159,565,000). As at 31 December 2017, the net asset value per share of the Company was US$1.92 (31 December 2016: US$1.58).

As at 31 December 2017, the net debt-to-total-equity ratio was 30.2% (31 December 2016: 14.0%) and the interest coverage was 12.5 times (2016: 5.9 times).

As at 31 December 2017, certain other property, plant and equipment of the Group with an aggregate net book value of US$157,298,000 (31 December 2016: US$103,928,000) and the Company’s interest in subsidiaries were pledged as securities against bank loans and a loan from the CS Finance with an aggregate amount of US$816,026,000 (31 December 2016: US$350,506,000)

Financial guarantee contracts
As at 31 December 2017, CSTD provided guarantees on loan facilities granted to a joint venture of US$9,226,000 (31 December 2016: US$9,110,000).

Treasury policy
The Group manages its foreign exchange risk by matching the currencies of its loans with the Group’s functional currency of major cash receipts and underlying assets as far as possible. The functional currency of the terminals business is either the Euro or Renminbi, which are the same currencies as its borrowings, revenues and expenses, so as to provide a natural hedge against the foreign exchange volatility.

The financing activities of joint ventures and associates were denominated in their respective functional currencies so as to minimise foreign exchange exposure in investments.

Interest rate swap contracts with financial institutions are used to achieve the optimum ratio between fixed and floating rates and to manage the related interest rate exposure. As at 31 December 2017, 29.2% (31 December 2016: 27.2%) of the Group’s total borrowings were at fixed rates. In light of market conditions, the Group continues to monitor and regulate its fixed and floating rate debt portfolio from time to time, with a view to minimising its potential interest rate exposure.

OPERATIONAL REVIEW
Markets Review
The global economy experienced a steady broadbased recovery in 2017, and the confidence of investors has been restored. According to the International Monetary Fund (“IMF”), global economic growth was expected to reach 3.7% in 2017 – the fastest growth pace since 2011 – which had driven the expansion of international trade to 4.7%, an increase of 2.2 percentage points over the previous year. Domestically, China’s economy continued to gather steam, with imports and exports fueled by rising external and internal demands. According to the statistics of the China Customs Department, the total amount of imports and exports in 2017 grew 14.2%, with exports and imports increasing by 10.8% and 18.7% respectively.

Backed by the increase of international trade and the steady recovery of the global economy, there was a turnaround in the global shipping market as the increase in the demand over supply during the year helped alleviate the overcapacity in the industry. According to Drewry Shipping Consultants Limited, the total throughput of global containers was expected to increase by 5.4% in 2017, rising 2 percentage points over 2016. Ports in China have also reported good growth as total throughput for the year was 236,800,000 TEU, an increase of 8.3%, up 4.7 percentage points from last year.

In 2017, the OCEAN Alliance was officially established. According to a survey conducted by Alphaliner on 13 February 2018, the OCEAN Alliance, together with the 2M and THE Alliances, accounted for 79% of the global container shipping capacity. With more than 41 shipping routes in Eastwest bound and Middle East Red Sea bound and 350 container vessels, the OCEAN Alliance, of which China COSCO Shipping Corporation Limited (“COSCO SHIPPING”), the parent company of the Company, is a member, has a total fleet capacity of 3,500,000 TEU. Ever since it started operation in April 2017, the OCEAN Alliance has been increasing its calls to the terminals of COSCO SHIPPING Ports and has accounted for 44% of the total throughput of the Group’s subsidiaries for the year. The Group believes the calls of the OCEAN Alliance’s fleet will continue to drive the growth of the Group’s throughput going forward.

Overall Performance
Benefitting from the economic recovery and with growth fueled by its acquisitions, the Group has achieved promising results for the year, with total throughput of 100,202,185 TEU. Excluding the throughput of QPI, the throughput increased by 13.4% to 87,932,185 TEU (2016: 77,572,219 TEU).

Throughput generated from the Greater China region increased by 8.0% to 69,091,521 TEU (2016: 63,989,237 TEU) accounting for 78.6% of the Group’s total. Throughput from the China region (excluding Hong Kong and Taiwan) increased by 6.8% to 63,904,439 TEU (2016: 59,827,565 TEU) occupying 72.7% of the total. The performance of the overseas portfolio was also encouraging for the year. Throughput increased by 38.7% to 18,840,664 TEU (2016: 13,582,982 TEU), made up 21.4% (2016: 17.5%) of the total, mainly due to the full year contribution by Vado Reefer Terminal and the twomonth contribution by the NPH Group. Added to this was Euromax Terminal with the inclusion of its throughput starting in October 2016, and recording a throughput of 2,693,337 TEU in 2017.

Total equity throughput of the Group increased by 11.0% to 29,740,584 TEU (2016: 26,798,320 TEU). With the operating efficiency of the Group’s terminals continuing to improve and adding the contributions from QPI, total terminal profit increased by 23.4% to US$299,866,000 for the year (2016: US$242,898,000).

COSCO SHIPPING Ports continued to extend its international footprint with an aim to build a balanced portfolio of terminals across an extensive network. During the year, the Group continued to explore overseas investment opportunities to align with one of its key strategies, ie, Globalisation. In China, the Group seized the development opportunity presented by the “Yangzte River Economic Belt” by taking a majority stake in Wuhan Yangluo Terminal and Nantong Terminal. It targets to develop these two subsidiaries into transshipment hub ports in the middle and lower reaches of the Yangtze River delta, so as to optimise the terminals network in the Yangtze River. Moreover, the investment in QPI further consolidated the Group’s leading position in the China market. The increased stake in the Zeebrugge Terminal in Belgium and the acquisition of the NPH Group enabled the Group to complete its terminal network in Mediterranean and Northwest Europe, which now covers major European hinterlands and shipping routes. The investment in Abu Dhabi Khalifa Terminal Phase II in 2016 enabled the Group to extend its reach to the Middle East. Moving forward, the investment focus of the Group will then be in Southeast Asia, Latin America and Africa, so as to continue to extend its network of terminals. As at 31 December 2017, the Group operated and managed 35 ports with 179 container berths around the world with a total annual handling capacity amounting to 102,720,000 TEU and 86 cargo berths in operation with an annual handling capacity of 262,670,000 tons. The Group’s terminal network currently spreads from the five major coastal port regions in China to Southeast Asia in Asia, and beyond to the Middle East, Europe and the Mediterranean.

During 2017, the Group endeavoured to upgrade the proportion of its interests in terminals to strengthen its role in their operation. In 2017, it acquired 51% of the shares of the NPH Group in Spain, the remaining 76% stake in Zeebrugge Terminal, and 51% of Nantong Terminal and 70% of Wuhan Yangluo Terminal, which increased the number of controlled terminals of the Group to 15, with a total design capacity of 28,470,000 TEU. During the year, total equity throughput of the Group’s subsidiaries amounted to 11,053,112 TEU (2016: 10,027,597 TEU), representing an increase of 10.2% compared with last year.

In addition, the proportion of overseas terminal business of the Group continues to increase. As at 31 December 2017, the number of overseas terminals under the Group increased to 13 with a total design throughput of 37,700,000 TEU, representing an increase of 5.8 percentage points from 26.5% in 2016 to 32.3%, with a significant proportion of that increase from overseas businesses. Overseas terminals completed a total container equity throughput of 7,447,503 TEU in 2017, an increase of 22.3% over the previous year, representing an increase of 2.3 percentage points from 22.7% in the previous year to 25.0%.

In January 2018, a new berth was added to COSCO-PSA Terminal Private Limited (“COSCO-PSA Terminal”) in Singapore, together with two large berths replaced in January 2017. Currently, the terminal operates three large container berths in Pasir Panjang Port, the total quay length is 1,200 metres.

Its operating capacity has increased from 1,000,000 TEU in 2016 to 3,000,000 TEU at present and its operational capability has been greatly enhanced. On 5 November 2017, the construction of the 90%- owned Abu Dhabi Khalifa Terminal Phase II was officially started. The terminal has 1,200 metres of quay length and three container berths with a design annual handling capacity of 2,400,000 TEU. This facility will be put into operation in the first quarter of 2019, further enhancing the Group’s overseas business.

Regional Performance
Bohai Rim
A stable performance was recorded in the Bohai Rim region. The throughput of the region, excluding QPI and Qingdao Qianwan Terminal, reached 15,974,976 TEU for 2017 (2016: 15,112,768 TEU), an increase of 5.7% and accounted for 18.2% (2016: 19.5%) of the Group’s total. The throughput of QPI in May to December 2017 totalled 12,270,000 TEU.

DCT completed the merger with DPCT and DICT in October 2017 and recorded a combined throughput of 1,324,584 TEU in November and December. In the first 10 months of 2017, the total throughput of DPCT and DICT amounted to 5,433,564 TEU. Benefiting from the acceleration in local trade, the throughput of Tianjin Port Euroasia International Container Terminal Co., Ltd. amounted to 2,469,753 TEU (2016: 2,232,973 TEU), a 10.6% increase. Impacted by the adjustment of shipping routes in the Port of Yingkou, the total throughput of Yingkou Container Terminals Company Limited (“Yingkou Container Terminal”) and Yingkou New Century Container Terminal Co., Ltd. (“Yingkou New Century Terminal”) dropped by 12.9% to 3,011,107 TEU (2016: 3,456,184 TEU), offsetting part of the throughput growth in the Bohai Rim region.

Yangtze River Delta
In the Yangtze River Delta region a positive performance was recorded. The throughput of the region, reached 19,630,693 TEU for 2017 (2016: 18,508,168 TEU), an increase of 6.1% and accounted for 22.3% (2016: 23.9%) of the Group’s total. Impacted by the decrease in local trade and competition from neighbouring terminals, the throughput of Lianyungang New Oriental International Terminals Co., Ltd. (“Lianyungang New Oriental Terminal”) declined 7.3% to 2,872,563 TEU (2016: 3,100,243 TEU). All of the other terminals in the region recorded varying increases in their throughput. Benefiting from the new routes and callings of the new alliances and the increased overall frequency of ship calls, Shanghai Pudong Terminal and Shanghai Mingdong Container Terminals Limited (“Shanghai Mingdong Terminal”) recorded 3.7% and 10.2% increases respectively in their throughput whereas the throughput of Ningbo Yuan Dong Terminal also recorded a 17.5% growth to 2,980,839 TEU (2016: 2,536,182 TEU).

Southeast Coast and other regions
A solid performance was recorded in the Southeast Coast and other regions. The regional throughput reached 5,079,660 TEU for 2017 (2016: 4,533,026 TEU), an increase of 12.1%, and accounted for 5.8% (2016: 5.8%) of the Group’s total. Benefitting from the addition of shipping routes and increased frequency of calls by the OCEAN Alliance, Xiamen Ocean Gate Terminal enjoyed an outstanding performance and recorded a considerable 32.7% increase in its throughput to 1,501,001 TEU (2016: 1,131,197 TEU). Also taking advantage of the increased trade in the region and integrated marketing activities, Quan Zhou Pacific Container Terminal Co., Ltd. and Jinjiang Pacific Ports Development Co., Ltd. (“Jinjiang Pacific Terminal”) recorded increases of 5.8% and 36.2% in their throughput. The growth for Jinjiang Pacific Terminal is particularly noteworthy, as the terminal actively attracted new clients and developed new routes.

Pearl River Delta
In the Pearl River Delta region an ideal performance was recorded. The throughput of the region reached 27,049,187 TEU for 2017 (2016: 24,697,218 TEU), an increase of 9.5% and accounted for 30.8% (2016: 31.8%) of the Group’s total. All of the terminals in the region recorded throughput increases as international trade has slowly recovered. Driven by increased laden and transshipment containers, the throughput of Yantian International Container Terminals Co., Ltd. rose 8.6% to 12,703,733 TEU (2016: 11,696,492 TEU), substantially higher than the 5.3% growth for the Port of Shenzhen. Benefitting from the support from the OCEAN Alliance and increased efficiency resulting from integrated operation, the throughput of Nansha Stevedoring Corporation Limited of the Port of Guangzhou (“Guangzhou Nansha Stevedoring Terminal”) and Guangzhou South China Oceangate Terminal increased by 2.7% to acombined 10,856,559 TEU (2016: 10,567,976 TEU).

As a result of the global economic recovery and the return of some of the routes by shipping companies to Hong Kong, the throughput of the Port of Hong Kong expanded by 4.8% to 20,755,000 TEU. Benefiting from increased local trade and improved efficiency from the co-management since 2017 by COSCO-HIT Terminal, Asia Container Terminal and Hongkong International Terminal, COSCO-HIT Terminal and Asia Container Terminal handled 3,488,895 TEU for 2017 (2016: 2,432,750 TEU), a 43.4% surge.

Southwest Coast
Driven by the twin trends of increased local trade and goods transfer in the Southwest Coast region, the throughput of Qinzhou International Container Terminal Co., Ltd. has risen. Thus, the Southwest Coast region recorded a strong performance. The throughput of the region reached 1,357,005 TEU for 2017 (2016: 1,138,057 TEU), an increase of 19.2% and accounted for 1.5% (2016: 1.5%) of the Group’s total.

Overseas
On the strength of the global economic recovery, the Group’s overseas business recorded an outstanding performance in 2017, with its throughput reaching 18,840,664 TEU, a 38.7% increase. Excluding Vado Reefer Terminal and the NPH Group, which were included in April and November 2017 respectively with a total throughput of 593,483 TEU, the throughput of the Group’s overseas business recorded vigourous growth of 34.3% to 18,247,181 TEU.

All overseas terminals have recorded throughput increases, except for the Suez Canal Container Terminal S.A.E. in Egypt, whose throughput for 2017 slightly decreased by 0.7% owing to the adjustment of routes between May and July. Benefitting from increased calling by the OCEAN Alliance and THE Alliance, the throughput of Piraeus Terminal and Kumport Terminal rose in 2017 by 6.4% and 59.8% to 3,691,815 TEU (2016: 3,470,981 TEU) and 1,063,335 TEU (2016: 665,398 TEU) respectively. The throughput of Antwerp Gateway NV in Belgium increased by 12.7% to 2,166,096 TEU (2016: 1,922,281 TEU), impacted by the installation of new equipment and the addition of new routes in 2017. Euromax Terminal in Rotterdam also saw a solid performance, with its throughout reaching 2,693,337 TEU.

Powered by increased throughput in new Southeast Asian markets, COSCO-PSA Terminal and Busan Port Terminal Co., Ltd. (“Busan Terminal”) both performed strongly. In January 2017, COSCO-PSA Terminal was moved to a new terminal with a higher capacity, which drove its throughput to reach 2,044,536 TEU (2016: 1,809,428 TEU), a 13.0% growth compared with last year, exceeding the 8.9% increase in the Port of Singapore. Benefitting from improved efficiency following integration of its resources, the throughput of Busan Terminal soared 70.5% to 3,554,512 TEU (2016: 2,084,592 TEU).

Source: COSCO Shipping Ports Limited