Freight rate revival boosts Nanjing Tanker profits
Recovery in freight rates in the global tanker market helped Nanjing Tanker, an offshoot of state owned China Changjiang National Shipping (Group), post a 66.9% increase in net profit to Yuan81.4m ($12m) in the first quarter in 2010 from Yuan48.8m in the same period a year earlier.
During the period, the Shanghai-listed company recorded an operating income of Yuan1.1bn, up 32.2% compared with Yuan812m in 2009.
In a statement, the company said it will set up a Hong Kong affiliate, Nanjing Tanker (Hong Kong), with a total investment of $61.5m in a bid to expand its shipping business in Hong Kong and Taiwan.
Time charter equivalent for the company"s very large crude carrier fleet increased to $51,000 per day in the first quarter this year, from $45,000 per day a year earlier.
In addition, three VLCCs and five medium range tankers totaling 1.1m dwt entered the market over the previous 12 months which significantly boosted the company"s total carrying capacity, the company said.
Meanwhile, the company"s financial expenses increased 114.4% to Yuan62.9m from Yuan29.3m due mainly to the expenses on the sale and leaseback of three tankers including the 74,090 dwt Yong Xing Zhou, the 110,503 dwt Ba Lu Zhou and the 45,764 dwt Chang Hang Xi Wang.
Separately, Nanjing Tanker announced a new agreement with Sinopec Chemical Products Sales, an offshoot of China"s largest oil refiner Sinopec, to undertake the shipping of ethylene for Sinopec within China.
Nanjing Tanker plans to purchase a secondhand 8,000 cu m ethylene tanker for this purpose. Total acquisition cost is about $49.7m.
Sinopec Chemical Products Sales specialises in the sales and logistic operations for petrochemical products including synthetic rubber and synthetic resin. Sinopec has an annual sales volume of 22m tonnes.
Sinopec is the China"s largest ethylene producer with production lines in the province of Fujian and the cities of Tianjin and Wuhan.
Nanjing Tanker first engaged in ethylene shipment in May 2008 with charter-in vessel. The partnership with SCPS will be the first time the company uses its own vessel to carry ethylene.