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CMES profit soars in first nine months, but expects full year loss

CMES profit soars in first nine months, but expects full year loss
China Merchants Energy Shipping has recorded a fourfold increase in profit in the first nine months of 2015 over the year-ago period, but it is anticipating a full year loss.

The bulker and tanker shipping arm of China Merchants Group posted a nine-month profit of RMB1.63bn ($256.5m), a surge from the gain of RMB313.07m in the same period of last year, in line with expectations.

Revenue also jumped by 158.4% year-on-year to RMB4.55bn.

The healthy earnings during this period were largely attributed to receiving a RMB741.03m government subsidy under the scrap-and-build policy, and the stronger tanker shipping market.

Despite the cheery financial results of January-September 2015, Shanghai-listed CMES pointed out that it is expecting a loss in the full year 2015, without elaborating on the reason.

The Chinese shipowner said the VLCC market entered into the lull period in the third quarter this year, and charter rates have gone down significantly compared to the second quarter.

In the gloomy dry bulk shipping sector, a slight rebound was seen in the third quarter but the oversupply problem continues to limit freight rates.

“During the reporting period, the company has capitalised on market opportunities, continued with strict cost control and achieved significantly improved results,” CMES stated.