Sanctions-hit Cosco Shipping Energy Transportation (CSET) reported improved third-quarter results mainly due to better tanker earnings.
According a quarterly report, the tanker arm of state conglomerate China Cosco Shipping achieved net profits of CNY 187m ($26.5m), compared with CNY 22.6m in the same quarter of 2018.
Operating revenue rose to CNY 3.39bn from CNY 3.18bn.
Despite limited scrapping and a large number of newbuilding deliveries, tanker earnings were supported by healthy global oil demand growth, CSET said.
“Iranian tankers were under continuing restrictions, the geopolitical context was becoming more complex, and tankers participated in drydocking programs for installation of exhaust gas cleaning systems, which further reduced the effective tanker supply and improved the supply-demand dynamics of tankers,” the company said.
However, some analysts have expected the company’s bottom line to take a heavy hit from US sanctions in the fourth quarter and possibly beyond.
Cosco Shipping Tanker (Dalian), one of CSET’s main subsidiaries, was put on the sanctions list for allegedly violating Iran-related sanctions on 25 September.
Based on Huatai Research’s estimates, Cosco Dalian contributed 39% of CEST’s net profit in the first half of this year.
In response to the sanctions, CSET said it is “comprehensively organising its various businesses, assessing the relevant impact, and conducting various response work.”
Flat profits of box unit
Cosco Shipping Holdings, the container shipping and terminal arm of Cosco Shipping, posted flat profits for the third quarter.
The company reported CNY1.36bn during the period, little changed from the a year earlier.
While the company’s revenues rose to CNY 39.5bn from CNY 37.1bn following its merger with Orient Overseas International Ltd, costs of operations also increased to CNY 38.9bn from CNY 37.3bn.
From January to September, the company’s container shipping volume reached 19.1m teu, showing an increase of 23.8% compared with the year-ago level.
Total throughput of its terminal business amounted to 97.1m teu in the nine months, up 9% year-on-year.
