Bloomberg China Shipping Development First-Half Profit Surges 60% as Bulk Rates Jump

China Shipping Development Co., the dry-bulk arm of the nation’s second-biggest shipping group, said first-half profit rose 60 percent as rates for transporting iron ore, coal and grains increased.

Net income rose to 978.8 million yuan ($144 million), or 0.29 yuan a share, from 613.6 million yuan, or 0.18 yuan, a year earlier, the company said in a filing to Hong Kong’s stock exchange today. That compares with the 967 million yuan average of three analyst estimates compiled by Bloomberg. Sales increased 34 percent to 5.53 billion yuan.

China Shipping benefited as economic growth boosted demand for raw materials. The Baltic Dry Index, a measure of commodity- shipping costs, averaged 49 percent higher in the first half than in the year-earlier period, amid gains in imports of commodities including iron ore and coal. China, the world’s biggest buyer of iron ore, boosted imports of the commodity by 4.1 percent in the first half, according to customs data.

“Benefiting from the gradual recovery of global economy and economic stimulus policies in various countries, global trading and shipping market showed signs of recovery,” China Shipping said in the filing.

The company, controlled by China Shipping (Group) Co., rose 1.1 percent to HK$11.52 in Hong Kong trading and today, before the earnings announcement. The stock has fallen 1.2 percent this year, compared with a 3.4 percent decline in the benchmark Hang Seng Index. The stock fell 1 percent to close at 10.12 yuan in Shanghai trading today.

The Shanghai-based company’s full-year cargo volume may rise 14 percent, it said in March.

China Shipping said earlier today it agreed to buy a 50 percent stake in a shipping unit of Guangzhou Development Industry (Holdings) Co. for 327.9 million yuan, according to a statement to Shanghai’s stock exchange. The acquisition will help boost the line’s coal-transportation network in southern China, it said.

“Demand for coal transportation will rise sharply as Guangzhou Development’s new power plants start operations in the next three years,” the statement said.

The Baltic Dry Index averaged 3,165 in the first six months, compared with 2,118 a year earlier. LINK