CSSC (Hong Kong) Shipping — China State Shipbuilding Corp’s (CSSC) leasing unit — will focus more on LNG shipping and other offshore clean energy projects due to the Covid-19 pandemic, the company has said.
In its interim report, the Hong Kong-listed company said that while the coronavirus crisis had led to difficult conditions for shipping markets, it would not stop the global transition to greener energy sources.
“During the time when the maritime industry is challenged, it is more conducive for the group to leverage the advantages derived from its industrial background and to expand the scale of its leasing business,” CSSC Shipping said.
“In the future, the group will continue to be optimistic about the long-term opportunities of clean energy transition, and will continue to lead the investment in and financing of offshore clean energy equipment such as LNG and offshore hydrogen energy.
Design focus
The company added: “The group will continue to utilise its profound industrial resources to strengthen the linkage between research and design institutes and manufacturers, so as to expand seaborne economy-related businesses such as marine fisheries and offshore clean energy.”
Backed by the central government in Beijing, the company’s parent is China’s largest shipbuilding conglomerate and has been involved in the development of offshore wind power projects.
CSSC Shipping had a portfolio of 130 vessels as of 30 June, of which 84 were in operation and the rest under construction.
The average lease period for the 84 ships was 7.94 years and their aggregate contract value amounted to HKD 34bn ($4.4bn).
Most of the vessels are gas carriers, tankers, bulkers and containerships.
Healthy results
The company reported a net profit of HKD 504m ($64m) between January and June this year, compared with a profit of HKD 451m in the same period of 2019.
According to the interim report, the better performance was due to more joint-venture vessels. Revenue fell to HKD 962m from HKD 1.2bn mainly due to falling income from financial lease contracts and lower interest income from loans.
“Leveraging the good cooperative relationship between the shipyard and the ship research institute under CSSC ... the group has implemented counter-cyclical investment management measures during market downturn and has increased its efforts to invest in high-quality ships,” CSSC Shipping said.
In July, TradeWinds reported that the company was planning to order an LNG-fuelled MR tanker at an affiliated yard on the back of charters to Louis Dreyfus Co.
