COSL(SH:601808)2016-08-29 16:00Financial Performance - The company's operating revenue for the first half of 2016 was RMB 6,989.7 million, a decrease of 43.4% compared to RMB 12,350.2 million in the same period last year [23]. - The net profit attributable to shareholders for the first half of 2016 was a loss of RMB 8,403.2 million, compared to a profit of RMB 894.7 million in the same period last year, representing a decrease of 1,039.2% [23]. - The weighted average return on equity decreased to -19.75%, down 21.64 percentage points from 1.89% in the same period last year [22]. - The company's net assets attributable to shareholders decreased by 18.4% to RMB 38,122.2 million from RMB 46,741.4 million at the end of the previous year [23]. - The company's total revenue decreased by 43.4% to RMB 6,989.7 million, with the drilling segment contributing 50.2% of total revenue [60]. - The gross profit margin fell to -10.4%, a decrease of 34.3 percentage points year-on-year, attributed to reduced workload and pricing pressures [60]. - The net loss for the period was a loss of RMB 8,399.5 million, a significant decline compared to a profit of RMB 921.9 million in the same period last year, reflecting a 1,011.1% decrease [49]. - The company anticipates a significant net loss for the full year 2016 due to ongoing low oil prices and competitive market conditions [56]. Revenue and Market Performance - The company achieved a significant milestone with overseas revenue accounting for over 40% of total revenue for the first time [29]. - The company successfully entered the Far East market and completed seismic acquisition contracts in the Arctic Barents Sea, setting a new record of 1,820.58 square kilometers of 3D seismic acquisition in a month [30]. - In the first half of 2016, the group's drilling service revenue was RMB 3,510.7 million, a decrease of 47.3% compared to RMB 6,665.3 million in the same period last year [37]. - The oilfield technical services revenue fell by 36.8% to RMB 2,142.1 million due to reduced operational volume [44]. - The group's ship service revenue decreased by 42.7% to RMB 869.6 million, with the owned fleet operating for 11,525 days, a decline of 3.1% [45]. - The geophysical and engineering survey services revenue was RMB 467.3 million, down 39.7% year-on-year [47]. - Domestic revenue declined by 48.1% to RMB 4,094.0 million, while international revenue decreased by 35.1% to RMB 2,895.7 million [62]. Financial Position and Cash Flow - The company reported a net cash flow from operating activities of RMB 304.6 million, a decrease of 79.2% from RMB 1,461.6 million in the same period last year [23]. - The company's cash and cash equivalents decreased by 35.9% to RMB 8,209.5 million from RMB 12,805.6 million due to debt repayment and interest payments [57]. - The company's total assets as of June 30, 2016, were RMB 80.95 billion, down from RMB 93.53 billion at the end of the previous year [124]. - The company maintained a loan repayment rate of 100% during the reporting period [116]. - The ending balance of cash and cash equivalents was 7,988,556,992 RMB, down from 6,146,006,760 RMB in the previous year [136]. - The company received 5,000,000,000 RMB from bond issuance during the first half of 2016 [136]. Corporate Governance and Compliance - The company maintains a commitment to transparency, with all board members present at the board meeting [2]. - The company has adhered to governance standards set by regulatory bodies, ensuring effective operation in compliance with relevant laws and regulations [92]. - The company has engaged Deloitte as its auditors for the fiscal year 2016, as approved in the 2015 annual general meeting [91]. - The company has not reported any changes in the controlling shareholder or actual controller during the reporting period [103]. - The company has not engaged in any fundraising or changes in fundraising projects during the reporting period [70]. Research and Development - The company has made significant progress in R&D, with successful applications of self-developed drilling measurement systems and directional drilling technologies in the domestic market [31]. - The group successfully developed and applied five new types of cementing materials and completed the customized design of 22 types of completion tools [44]. - Research and development expenses decreased by 40.8% to RMB 186.6 million, reflecting reduced spending on materials [49][52]. Challenges and Future Outlook - The company continues to face severe challenges in its operations due to low oil prices and a sluggish oilfield service industry [74]. - The company plans to enhance its international operational capabilities and focus on innovation and reform to navigate the challenges in the industry [33]. - The company plans to continue expanding its domestic and international market presence while strictly controlling costs to improve future performance [56]. - The company expects a significant net loss for the first three quarters of 2016, with a projected loss of RMB 13 billion after asset impairment deductions [74]. Shareholder Information - As of June 30, 2016, the total share capital of the company was 4,771,592,000 shares, with China National Offshore Oil Corporation holding 2,410,849,300 shares, accounting for 50.53% of the total share capital [98]. - Public investors held 2,360,742,700 shares, representing 49.47% of the total share capital, with H-share shareholders holding 1,811,122,000 shares, which is 37.96% of the total [98]. - The top ten shareholders include China National Offshore Oil Corporation, which holds 50.53% of the shares, and Hong Kong Central Clearing Limited, which holds 37.89% [101]. - The company did not experience any changes in share capital structure during the reporting period [97]. Asset Management and Impairment - Asset impairment losses surged to RMB 7,142.4 million, a 509.0% increase year-on-year, primarily due to goodwill and fixed asset impairments [49][52]. - The company reported a 100% impairment of goodwill, amounting to RMB 3,455.4 million, due to market impacts [57]. - The company assesses financial assets for impairment at each balance sheet date, recognizing impairment losses when objective evidence indicates a decline in value [177].