(Yicai Global) Aug. 28 -- China’s Cosco Shipping Energy Transportation, which runs the world’s largest fleet of oil tankers, saw its net profit skyrocket more than six times in the first half from the same period last year as the drastic drop in global demand for oil during the Covid-19 pandemic led to a chronic shortage of tankers.

The unit of China Cosco Shipping, the country’s biggest shipping firm by fleet size, posted net profit of CNY2.9 billion (USD422.3 million) in the six months ended June 30, and is expecting to rake in even more next month as tanker rental rates remain high, the firm said in its semi-annual earnings report released yesterday. Revenue in the first half was up 36.77 percent to CNY9.8 billion (USD1.4 billion).

The plummeting demand for oil due to the brake on global and regional travel has led to oil refineries being saturated with the black gold. As a result, many tankers have been stuck at ports for a long time waiting to offload. This has led to ever tighter supply of the ships and rocketing rents, the Shanghai-based firm said.

The average price of a large crude oil carrier on the Middle East to China route rose four-fold in the first half to USD82,200 per day. The rentals of other types of ships on other routes also either doubled or tripled, it said.

This drove the firm’s gross profit from its tanker fleet up almost six-fold to CNY2.6 billion in the first half, with its gross profit margin up 30 percentage points to 41 percent, the company said. Revenue was up 60 percent to CNY6.4 billion over the same period.

Yet business volume remained roughly the same as last year. Cosco Shipping transported 81.1 million tons of goods, up 2.98 percent year on year, and turnover grew 0.97 percent to 257.9 billion tons of sea miles, it added.

Despite the good news, the firm’s stock [SHA:600026] closed down 1.16 percent at CNY7.69 (USD1.12) today.

Editor: Kim Taylor