China Merchants Energy Shipping (CMES) expect its net profit for last year to have nearly doubled due to asset acquisitions, the expansion of valemax fleet and a recovery in tanker earnings.
In an exchange filing, the Shanghai-listed company said preliminary results showed its net profits grew by a range between CNY 520m ($76.5m) and CNY 630m in 2018.
When one-off items were excluded, net profit rose by a range of CNY 320m-CNY 390m.
CMES, a tanker and bulker arm of state conglomerate China Merchants Group (CMG), posted net profit of CNY 614.4m in 2017 and CNY 329m when one-off item were excluded.
According to CMES, the company has managed to enlarge its profit base after swapping new shares for some shipping assets of CSC & Sinotrans, another subsidiary of CMG.
“The VLCC market showed a strong rebound in the fourth quarter, so our tanker fleet recorded stronger annual performance in 2018 when compared with 2017,” according to CMES, which owns the world’s largest VLCC fleet.
“We have been taking delivery of our VLOCs and enjoying more revenues from the dry bulk segment,” CMES added.
The company has 24 400,000-dwt valemaxes in operation and four on order.
All of those vessels are contracted to ship Vale’s iron ore from Brazil to China on a long-term basis.
CMES is due to release its full, audited results on 28 March.
