China Cosco swings to profit on strong government subsidies

Net profit in the first half came up to RMB1.9bn as against a loss of RMB2.28bn in the same period of last year.

Revenue during the reporting period stayed stable at RMB29.97bn, with the container shipping business generated higher income but the dry bulk shipping division posted lower earnings.

China Cosco pointed out that it benefitted from lower bunker fuel costs during the first half, and its cashflow was significantly boosted by government subsidies from the scrap-and-build policy from which it gained RMB3.96bn

As at 30 June 2015, China Cosco operated a fleet of 220 bulk carriers with a total capacity of 22.15m dwt and a further 40 bulkers with 3.47m dwt combined capacity on order. It also has 185 containerships with a total capacity of 879,070 teu and another 10 units of 117,960 teu in capacity on order.

Meanwhile, the shares trading of China Cosco, the flagship unit of Cosco Group, remained suspended pending a major announcement that is widely believed to be a merger with compatriot China Shipping Group (CSG).

The listed subsidiaries of Cosco Group and CSG have all halted trading since 10 August.