China Shipping delays ship deliveries to cut costs
HONG KONG |
HONG KONG (Reuters) - China Shipping Development Co Ltd, an oil and dry bulk shipping firm, said on Wednesday that it has delayed delivery of 10 ships and is in talks to postpone another 10 to cut interest costs after reporting its first net loss in 14 years.
"The ten ships that have been delayed between six and 18 months include oil tankers and bulk vessels," said chief financial officer Wang Kangtian.
"Delay delivery of each ship will save up to 800,000 yuan ($125,900) of interest expense each month," he told reporters.
China Shipping was also in talks with domestic shipbuilders to extend the delivery date of another 10 ships, Wang added.
The company on Tuesday posted a net loss of 495 million yuan for the six months to June, its first loss since 1998, reversing a profit of 684 million yuan for the same period last year on high fuel cost, weak demand and sliding freight rates amid a supply glut.
As China's largest domestic coastal oil and power coal shipping firm, China Shipping has also suffered severe competition and a slowing economy at home.
China Shipping controls 255 vessels with total capacity of 18.6 million deadweight tonnes, including those chartered by the company and operated by jointly controlled firms.
The company plans to take delivery of 11 tankers and 17 bulk carriers in the second half of this year and will have another 22 coming on stream in 2013 and 2014.
($1 = 6.3562 Chinese yuan)
(Reporting by Alison Leung; Editing by Nick Macfie)
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