The tanker and boxship arms of giant Chinese state shipowning group China Cosco Shipping expect to post a combined profit of more than $1bn for 2019.
Cosco Shipping Energy Transpotation (CSET) said in a profit alert that it is forecasting net earnings for last year of between CNY 400m and CNY 480m ($69.5m), against CNY 75m in 2018.
The Shanghai- and Hong Kong-listed company has a fleet of 170 tankers and LNG carriers, including 19 on order.
CSET said: "The growth of global demand for oil remained steady and the supply-demand relationship of oil shipping has improved."
And it added that the overall performance of the sector was low at the start of 2019, but then surged, with the average daily time charter equivalent of the Middle East Gulf to China route for a VLCC averaging $39,387 per day, up 109%.
Other major shipping routes for other vessel types rose by between 77% and 199% year-on-year.
However, the company had last year posted net profits of CNY 583m between January and September, suggesting a net loss of at least CNY 103m last quarter.
Cosco Shipping Tanker (Dalian), one of CSET’s main subsidiaries, was put on the US sanctions list for allegedly transporting Iranian oil on 25 September.
The US action took Cosco Dalian's fleet of 42 tankers, including 26 VLCCs, out of trading for much of the fourth quarter. Operations of China LNG Shipping, a 50:50 joint venture between CSET and China Merchants Energy Shipping, were also affected for some time.
CSET is due to issue its full annual results on 28 March.
Boxship boost after OOCL deal
Meanwhile, boxship company Cosco Shipping Holdings told the Hong Kong exchange that profit should be CNY 6.76bn for 2019, up from CNY 1.23bn the year before.
The company, with 169 boxships and two general cargoships, said it had "proactively responded to external adverse factors, adhered to the guiding principle of outperforming the market and driving innovation, and focused on improving the quality of shipping services".
It also fully leveraged the advantages of scale and synergies arising from taking over Hong Kong line OOCL in 2018.
"The total synergies achieved in 2019 exceeded the target set at the beginning of the year," the company said.
The operator also increased its capacity in emerging, non-China and regional markets, and boosted the proportion of cargo flow to the US from Southeast Asia and other regions.
The company also pointed to increasing throughput for its port business.
Cosco Shippign Holdings also booked an unspecified gain from selling its terminal business in Long Beach in California.
