HONG KONG: COSCO International Holdings, a State-owned shipping conglomerate based in Beijing, posted a 9 percent increase in its first-half net earnings, benefiting from the drop in income tax expenses and reduced attribution of after-tax earnings to the minority shareholders.

Net profits for the six months ended June 30 climbed to HK$245.8 million, compared to HK$225.2 million a year earlier.

The company said the after-tax earnings of COSCO International Ship Trading Company would not need to be attributed to the minority shareholders, as the company has become a wholly-owned subsidiary after the acquisition of COSCO International Trading Company.

A COSCO container is moved at the Kwai Chung shipping terminal in Hong Kong earlier this year. The State-owned conglomerate reported yesterday a 9 percent increase in net earnings in the first half. Bloomberg News

The company will pay an interim dividend of 1 HK cent per share to its existing shareholders.

Despite the jump in net earnings, first-half sales of COSCO International slumped 45 percent to HK$698.3 million, as the shipping market and the container manufacturing market rapidly declined amid the global financial crisis.

COSCO International's vice chairman Wang Futian said the shipping industry has already bottomed out, as the Baltic Dry Index, an international shipping and trade index measuring the changes in cost to transport raw materials, has now bounced back to more than 2,000 points from its lowest level of 600 points in December 2008.

"However, the time for a full recovery is as yet unknown. The index is expected to fluctuate for quite a long period," Wang told reporters in Hong Kong yesterday.

Wang said COSCO International is expected to report similar profits for the first half in its full-year results, while the company will continue to trim its costs and consolidate its current business to better maintain the earnings.

For the first half of 2009, revenue of the company's ship trading agency services gained 4 percent to HK$65.6 million.

Turnover of the marine insurance brokerage services slid 5 percent to HK$29.6 million, while sales of marine equipment tumbled 20 percent to HK$202.5 million.

Weighted down by the falling demand for marine coatings, sales of coatings nosedived 80 percent to HK$165.3 million.

The plunge in turnover also dragged gross profit down 51 percent to HK$182.8 million, while the average gross profit margin also skidded 4 percentage points to 26 percent.

Shares in COSCO International yesterday finished down 1.59 percent, or HK$0.05, at HK$3.1.

(HK Edition 09/03/2009 page4)