Shanghai-listed COSCO Shipping (COSCOL), forecast that its profit would shoot up more than 33 times year on year (y/y) to CNY391.8 million (USD63.2 million) in the first half of 2015, owing to one-off investment gains and government subsidies.
During the first half of 2015, COSCOL, the special carrier unit of COSCO Group, reaped CNY301.0 million in proceeds by disposing all of its shareholdings in ELF Lubricants (Guangzhou), which is a subsidiary of TOTAL China, a flash financial report of COSCOL said on 10 July.
In addition, COSCOL received a total of CNY95.9 million in government subsidies on 30 June after it scrapped old tonnage and replacing them with new orders. In 2013, the Chinese government rolled out policies to use subsidies to encourage Chinese shipowners to scrap China-flagged old vessels. The subsidies will be doubled if the shipowners order new tonnage at Chinese shipyards to match the demolished tonnage.
Also, the steep fall in bunker fuel costs helped COSCOL reduce operating costs while the company improved its fleet structure.
During the same period, COSCOL’s revenue rose 1.7% y/y to CNY3.6 billion.