Cosco Shipping Energy Transportation (CSET) expects to post a year-on-year decline in first-half profit due to a lack of vessel disposals this year.

The Hong Kong-listed VLCC giant expects its interim net profit to be down by CNY 345m ($47.4m), or 11.9%, year on year to CNY 2.55bn.

In the first half of the 2023 financial year, the company disposed of five vessels, including three veteran VLCCs to Indian cash buyers — the 299,100-dwt Cosbright Lake and Cosglory Lake (both built 2003), which sold for $40m and $42m, respectively, and 298,800-dwt Cosgreat Lake (built 2002), which fetched $39m.

CSET said in a regulatory filing that the sales generated a total disposal gain of CNY 398m.

For the first half of this year, it said the freight rates of the international oil shipping market reflected a “positive trend in supply and demand fundamentals”.

“According to the data from the Baltic Exchange, from January to June 2024, the average time charter equivalent of VLCCs on the Middle East-China route — TD3C — was $41,269 per day,” it said.

“The freight rates of the LR vessel type of large product oil tankers have risen in two waves, continuing to maintain good yield level, and other small and medium-sized tankers have also seen the gradual rise in their freight rate pivots.”

Describing itself as a “shipowner of a full range of oil tanker types”, CEST said it has “fully captured the market opportunities of different vessel types” and adjusted its fleet capacity and dry-docking schedules to achieve an increase in overall fleet revenue.

In the first quarter of 2024, it reported a net profit of CNY 1.23bn, up 12.7% year on year, while revenue was up 3.7% to CNY 5.8bn.

At the end of the last financial year, the CSET-owned and controlled fleet numbered 156 tankers with a total capacity of just over 23m dwt.