China Shipping Development, a leading mainland coal and oil shipping company, said first-half profit rose 70 per cent as it expanded its fleet and a rise in dry bulk freight rates outpaced a drop in tanker rates.
The company further forecast that nine-month net profit will rise more than 50 per cent due to the buoyant mainland demand for iron ore and coal.
Net profit increased to 2.2 billion yuan from 1.3 billion yuan a year earlier as sales gained 29 per cent. In the first half, 42 dry bulk vessels acquired from parent China Shipping (Group) were added to the fleet.
Rising dry bulk freight rates also boosted profit. The rate-tracking Baltic Dry Index climbed to an average of 5,310 points in the first half, up 113 per cent year on year. The rate gain helped push the profit margin for coal transport up to 49.67 per cent from 32.72 per cent a year earlier.
The shipping line moved 61.5 billion tonnes nautical miles of dry bulk, up 50 per cent, with 40 billion tonnes nautical miles devoted to coal. Sales from dry bulk increased 86 per cent to 3.4 billion yuan while sales from moving coal rose 84 per cent to 2.4 billion yuan.
Tanker rates were hit by the milder weather in the Northern hemisphere, which eased oil demand. The international integrated tanker index dropped 9 per cent to 1,161 points from a year earlier while the index for very large crude carriers declined 26 per cent on the Middle East-to-Japan route due to oversupply.