China Merchants Energy Shipping, part of state conglomerate China Merchants Group, has recorded weaker net results for the first nine months of the year.
Lower tanker earnings more than offsetting higher income from dry bulk shipping.
The Shanghai-listed company—one of the world’s largest owners of VLCCs and VLOCs—posted net profit of CNY 439.9m ($63.2m) for the nine months, down 47.9% on year.
For the third quarter alone, net profit dropped to CNY 141.5m from the year-ago level of CNY 258m.
When one-off items, such as scrapping subsidies, were excluded, net profit fell 61.7% year on year to CNY 230m for the nine months.
The weaker results came as gross profit from its tanker fleet dropped 89.5% to CNY 14.1m.
“The international tanker markets suffered persistent oversupply,” the company said in a quarterly report.
“But we did see a slow recovery in freight rates as the pace of newbuilding slowed and scrapping picked up.”
Gross profit from its bulker fleet amounted to CNY 61.2m in the nine months, up 90.8% on year.
“The dry bulk shipping market was better than expected, with strong demand for shipping bulk goods like coal. Overall the rates continued to increase,” CMES added.
Total revenue of CMES increased to CNY 7.32bn from CNY 6.96bn in the first nine months of 2017.
The increase came after CMES acquired affiliates Shanghai Changhang Shipping, CSC RoRo Logistics and Sinomarine Livestock Carriers amid intra-group restructuring earlier this year.
