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Sinotrans Shipping’s Profit Declines on Lower Interest Income

Aug. 9 (Bloomberg) -- Sinotrans Shipping Ltd., the dry-bulk arm of China’s third-largest shipping group, said first-half profit fell 8.7 percent, mainly on reduced interest income.

Net income fell to $58.5 million, or 1.46 cents a share, from $64 million, or 1.6 cents, a year earlier, the company said in a Hong Kong stock exchange statement today. Sales rose 12 percent to $133.7 million, mainly on increased dry-bulk revenue.

Pacific Basin Shipping Ltd., Hong Kong’s biggest dry-bulk line, also boosted revenue in the period as China’s rising imports of iron ore, a key steelmaking ingredient, boosted freight rates. The Baltic Dry Index, a measure of commodity-shipping costs, traded at an average 3,163 in the first half of this year, 49 percent higher than a year earlier.

Sinotrans Shipping, a unit of Sinotrans & CSC Holdings Co., fell 0.3 percent to close at HK$3.38 in Hong Kong today. The stock has fallen 6.1 percent this year, compared with a 0.3 percent decline for the benchmark Hang Seng Index.

First-half dry-bulk shipping sales rose 14 percent to $125.2 million, oil-tanker sales increased 70 percent to $8.61 million and container-shipping sales fell 9.3 percent to $9.76 million, Sinotrans Shipping said. Finance income fell to $4.96 million from $14.6 million, it said.

The company said it will pay an interim dividend of 2 Hong Kong cents per share.

Sinotrans Group in April said it may buy overseas dry-bulk vessel owners on the rebound in demand. The group had talked to at least five shipowners in southeast Asia and the Middle East, Assistant President Li Zhen said in an interview at a conference in Tokyo. Buying logistics companies worldwide was also being considered, he said.

Pacific Basin boosted first-half sales by 45 percent to $616.5 million.

China Ocean Shipping (Group) Co., China Shipping Group Co., and Sinotrans Group, the nation’s three largest shipping companies, are all state-controlled.

To contact the reporter on this story: Wing-Gar Cheng in Hong Kong at wgcheng@bloomberg.net.

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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