Sinotrans first half profit off 8.7pc as interest income shrinks

SINOTRANS SHIPPING and its subsidiaries have reported a net profit of US$58.5 million for the first half ended June 30, 2010, down 8.7 per cent from $64.06 million last year, mainly because of declining interest income.

The group posted $133.71 million in revenues in the first half, an increase of 11.9 per cent year on year. Operating profit rose 0.02 per cent to $50.88 million.

"With the global economic recovery under way in the first half of 2010, demand for shipping grew and the international shipping market witnessed a positive turnaround," said Sinotrans Shipping chairman Zhao Huxiang.

Revenue from ocean freight was up 20.4 per cent to $22.68 million on higher freight rates, said the company.

"The container shipping market is still recovering in 2010. Revenue from container shipping for the period ended June 30, 2010 was $9.76 million," the company statement continued.

Sinotrans operates a fleet of 43 vessels with an aggregate capacity of 2.31 million dwt. A total of 11 newbuilding vessels with 1.12 million dwt are to be delivered from the second half into 2011.

"In the first half the group's moderate operation strategy of long- and short-term chartering helped reduce the impact of market fluctuations. With the newbuilding dry bulk vessels gradually put into operation, our revenue from charter hire income increased by 12.7 per cent to $101.43 million," the company said in a statement.

Sinotrans said it expects the shipping market to remain volatile over the year. "Global demand for shipping will maintain its growth momentum on the back of rapid development in the PRC economy which will provide strong support to the shipping market while emerging countries are expected to carry further weight in the shipping market. However, the market still faces pressures on the recovery of charter hire and freight rates with the accelerated delivery of newbuilding vessels into the market."
(Source:www.schednet.com)