CDB Leasing first half shipping profit up 24%

CDB Leasing reported a 4% drop in profit for the first six months of 2024, compared to the year-ago period, but its first half results showed strength in its shipping portfolio.

The group’s ship leasing segment reported record new investment of RMB9.1bn ($1.3bn) for the period, which also saw the delivery and charter of 15 newbuilds. A pre-tax profit increase in the ship leasing segment of 24% to RMB437.9m compared to an overall drop of 2.7% for the group to RMB2.6bn, led by a loss for the aircraft leasing segment.

The group had 14 vessels under construction at the end of the period, including 9 bulk carriers and 5 product tankers. In July, China Development Bank said it was considering a sale of CDB leasing after carrying out a “business assessment” of the company.

In its market commentary, CDB Leasing noted strength in the dry bulk market as a driver of its success, the fleet lifted by a 58% increase in the Baltic Dry Index. Product tankers remained at historical high earnings it added, while a 29% decrease in the LNG carrier freight rate was due to “insufficient downstream demand and the delayed delivery of liquefaction capacity at the export end.” 

Assets under the ship leasing segment increased by 29.3% to RMB81.2bn at the end of the period, compared to the end of 2023, while revenue rose by RMB3.3bn or 23.7% compared to the first half of 2023.

Related:CDB considers sale of leasing arm

Despite accounting for just 16.9% of the group’s assets, ship leasing provided 24.4% of group revenue for the first half.

Finance lease income from ship leasing rose 40.4% to RMB590.9m, while operating lease income rose 39.0% to RMB2.5bn. Of the 248 ships in operation in the ship leasing segment, 210 were under operating lease and 38 ships were under finance lease. 

By ship type, the fleet at the end of June comprised 172 bulk carriers, 44 product tankers, 13 container ships, 17 LNG ships and 2 passenger cruise ships. The average fleet age was 6.4 years, including bulk carriers at 5.9 years, container ships at 7.8 years, product tankers at 6.5 years, LNG ships at 9.7 years, and passenger cruise ships at 15 years. 

Average utilisation rates were 99.5% in the first half of the year, said CDB Leasing.