China Shipping invests in vessels to raise capacity
Mainland oil and bulk carrier China Shipping Development will increase capacity by about 30 per cent in the next couple of years to capture the rapid growth in marine transport.
The H share will invest 3.8 billion yuan (HK$3.56 billion) in buying 11 oil tankers and eight bulk cargo vessels, with deadweight tonnes totalling 1.63 million, to be delivered by 2005.
'The company has invested 900 million yuan in buying vessels this year. We set aside another 1.7 billion for next year and 1.2 billion yuan for 2005,' chief financial officer Wang Kangtian said.
'About 20 per cent of the investment will be funded by bank loans. The company will pay for the rest in cash.'
China Shipping on Monday reported an interim net profit of 460 million yuan, up more than 75 per cent year on year. Turnover increased a comparative 15.8 per cent to 2.35 billion yuan. Revenue from oil transport, its major business, surged 17 per cent to 1.57 billion yuan. The company moved 18.93 million tonnes of domestic trade oil in the first half, up a comparative 9.9 per cent.
But it may lose five million tonnes of its domestic oil transport business after major client China Petroleum and Chemical Corp began using pipelines to reduce transport costs.