By Wang Lan (China Daily)
Updated: 2007-11-01 13:41

China COSCO Holdings Co Ltd, the country's largest shipping conglomerate, yesterday posted net profit of 664.09 million yuan (US$88.8 million) for the third quarter, mainly fueled by rising freight costs and a steady increase in demand.

China COSCO's net profit for the first nine months amounted to 1.5 billion yuan, it said in a statement to the Shanghai exchange.

Earnings per share were 0.08 yuan, compared to 0.20 yuan a share in the first nine months.

The company said its third quarter return on net assets was 2.01 percent - substantially less than the 4.6 percent for the first nine months.

China COSCO earlier posted a half-year profit drop of 8 percent, but comparative figures for the third quarter were unavailable.

The company transported 1.48 million standard containers (twenty-foot equivalent units) of cargo in the third quarter, up 7.2 percent from a year earlier. Its revenue in the container business totaled 11.2 billion yuan, up 21.8 percent from the year before.

In the first nine months, China COSCO moved an aggregate 4.24 million containers, up 11.5 percent from the previous year. Revenue from the container business rose 19.2 percent to 29 billion yuan.

"The company's purchase of its parent group's dry-bulk shipping fleet also helped it increase total sales," said Qian Hongwei, an analyst at CITIC China Securities.

The company's growing dry-bulk shipping business was an important contributor to its sales growth, analysts said.

The BDI, or Baltic Dry Index, a global benchmark indicator that tracks the freight charges of dry bulk carriers, has soared 72 percent, or 4520 points, since late June, to reach 10798 points at the end of October.

Shares in China COSCO more than doubled in the three months to September 30, fueled by the group's A-share initial public offering in June and the acquisition of its parent company's dry bulk carrier fleet.

China COSCO's A shares yesterday dropped 0.33 percent to end at 58.25 yuan, while its H shares fell 5.71 percent to HK$33.8.