Although revenue increased by only 6% to HKD4.74bn gross profit rose 29% to HKD423.8m and margins improved 1.5 percentage points to 8.9% as margins improved in the container coatings and asphalt trading segments improved.
"In the first half of 2014, volume of both scrapped vessels and newbuild contracts recorded significant increase as compared with the same period last year, as a result of Chinese shipowners’ accelerated fleet restructuring activity, which brought great opportunities to the group’s various core businesses in shipping services," Cosco International said in a stock market release.
Revenue from shipping services grew by 12% to HKD4.39bn while pre-tax profit from the segment spiked up 47% to HKD220.5m.
Cosco International said that during the first half, Cosco Group companies intensified efforts in scrapping old vessels and ordering new ones, which boosted the volume of scrapped vessels and newbuild contracts through its agency. During the period, a total of 32 newbuild vessels or about 2.5m dwt were contracted through the agency compared to none in the previous corresponding period.
Ship resales amounted to 43 comprising 2m dwt from just nine the previous year. As a result of the sharp increase of commission income from newbuilds, second-hand vessels and others, revenue from ship trading agency service segment doubled to HKD90.8m and pre-tax profit reached HKD69.4m an increase of almost two and half times compared to the year before.
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