Shanghai-listed China Shipping Development (CSD) posted a profit of CNY65.9 million for the first quarter of 2015, surging 27% year on year (y/y) from its 2014 profit of CNY51.9 million.
During the review period, the company recorded an 8.5% y/y drop in its revenue to CNY2.9 billion.
Its 16 very large crude carriers (VLCCs) contributed approximately CNY310 million to the company’s revenue in the first quarter of 2015, since the average freight rate of the benchmark Middle East Gulf to Japan (TD3) route remained USD62,000 per day, according to Industrial Securities.
However, the company’s revenue from coastal coal shipping dropped 37.3% y/y to CNY320 million.
To avoid horizontal competition with China Shipping and its other subsidiaries, China Shipping Development will be positioned as the only oil, bulk cargo, and LNG shipping branch of China Shipping group, according to CSD’s filing to Shanghai Stock Exchange.
China Shipping also promises to inject its bulk carriers and VLCCs into CSD or sell them out in the coming five years.
The company’s performance is expected to improve in the second quarter, as its fuel contracts locked at high prices will end by then, and coastal coal shipping is set to recover, projected the China International Capital Corporation.