Cosco International, the shipping services arm of China Ocean Shipping, reported a 49% increase in annual net profit, despite an 18% decline in revenue year-on-year.
The company recorded HKD 359 million (USD 46.3m) net profit in 2014, compared to HKD 241.6 million the year before.
The revenue fell from HKD 9.3 billion (USD 1.2bn) recorded in 2013, to HKD 7.6 billion (USD 980m) in 2014, which the company attributed to a ”gradual withdrawal from relatively high risks businesses.”
The demand for shipping services increased in 2014, driven by the accelerated adjustment of fleet structures by the shipowners. As a result, volume of both new build contracts and scrapped old vessels increased significantly during the year, which boosted the demand for the company’s various shipping services businesses, including ship trading agency services.
The company’s profit before income tax from shipping services grew 34% year-on-year to HKD 393.4 million (USD 50.7m) (2013: USD 37.9m), mainly driven by the contribution from coatings, ship trading agency and marine equipment and spare parts segments.
Looking ahead Cosco International expects the global economic recovery to be exposed to a number of uncertainties.
The overcapacity issue will continue to exist in shipping industry. Therefore, shipowners are expected to take counter measures to control various costs, which is expected to bring pressure to the company’s shipping services business.