Hong Kong listed Sinotrans Shipping has posted a first half 525 per cent profit increase to US$10 drawn on revenues of $112.7 million, an increase of 20.6 per cent, according to Shipping Gazette.
"Our cost control was good in the first half and fleet utilisation rate reached nearly 98 per cent. We also locked time charter contracts at around $11,000 per day, and that should help earnings later on," said general manager Li Hua.
"But it will be one or two years before the supply-demand situation becomes more balanced," he said, adding that the company forecasts oversupply in bulker markets in the short term, despite higher yields in the first half.
Said controller Xie Shao Hua: "Short-run fundamentals are plagued by large amounts of tonnage delivered in the previous years, even though fleet growth rate is at a 10-year low. It's hard to see any immediate, significant improvement."
Said company chairman Li Zhen: "Sinolines made a net profit in January-June for the first time in several years and Tianze has some long-term contracts that can bring in stable revenues."
Sinotrans Shipping also managed to redeploy some vessels to Europe from the Indonesian trade, as Jarkata moved to ban mineral exports in January to promote domestic processing.
The company said it completed the $138 million transaction to acquire Sinotrans Container Lines, China National Chartering (Sinochart) and Sinotrans Tianze from its parent on July 31.
Barclays Capital said it expected those assets to be loss-making in 2014-2015 and drag Sinotrans Shipping's results into the red excluding one-off items, reported Lloyd's List.
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