The parent China Shipping Group owns 51 per cent and the remaining shares are held by state-owned shipping firms of Shanghai, Guangzhou and Dalian.

The move signals the shipping firm's interest in diversifying into land cargo transportation. The logistics firm operates four piers in Shanghai, Dalian, Lianyungang Port in Jiangsu province and Zhanjiang in Guangdong province. It also runs fleets of cargo trucks and ships as well as coastal and inland warehouses.

Turnover dropped to 1.52 billion yuan from 1.61 billion yuan previously as the company's aggregate shipping capacity was reduced.

Earnings per share rose to 3.75 fen from 2.49 fen. No interim dividend will be paid.

The growth was helped by the higher-margin crude oil import shipping business, which grew 37 per cent in volume year on year.

The coal shipping volume also grew by 17 per cent.

Despite the 48.9 per cent rise in fuel costs caused by the rising oil price, the company managed the profit gain by cutting other expenses and trimming the fleet.

Operating costs decreased by 3.8 per cent compared to the same period last year as the company cut its fleet by disposing of inefficient vessels.

Management expenses decreased by 53.2 per cent while expenses for maintenance, insurance and port charges fell by more than 20 per cent.

The company's outstanding loans as at the end of June were 2.96 billion yuan, of which 60 per cent was in the local currency. Cash on hand is about 340 million yuan and the gearing ratio stands at 41 per cent.

Mr Li said China Shipping had invested 2.5 million yuan for a 10 per cent stake in Bao Jiang Shipping, which is owned by its top coal-consuming client, Shanghai Bao Shan Steel Group. The company has already proposed a 50:50 coal transportation joint venture with a mainland power plant operator China Huaneng Group, another leading coal consumer.

They will each make an initial investment of 25 million yuan.