China Merchants Energy Shipping (601872) Q3 2024 earnings summary

Executive summary

• Revenue for Q3 2024 reached RMB 6.06 billion, up 0.48% year-over-year; net profit attributable to shareholders was RMB 872 million, down 11.67% year-over-year.

• For the first nine months, revenue was RMB 19.30 billion, up 1.44% year-over-year; net profit attributable to shareholders was RMB 3.37 billion, down 10.35% year-over-year.

• Decline in net profit mainly due to increased income tax expenses and reduced government subsidies.

Financial highlights

• Q3 basic and diluted EPS were RMB 0.11, down 8.33% year-over-year; nine-month EPS was RMB 0.41, down 10.87%.

• Operating cash flow for the first nine months was RMB 6.40 billion, down 4.13% year-over-year.

• Total assets at quarter-end were RMB 65.91 billion, up 5.64% from year-end 2023.

• Net assets attributable to shareholders stood at RMB 37.31 billion, up 1.14% from year-end 2023.

Outlook and guidance

• VLCC market faced pressure from OPEC+ cuts and lower-than-expected Chinese imports, but period charter rates remained firm.

• Dry bulk market outperformed expectations, with BDI up 57% year-over-year; company’s dry bulk fleet TCE rose 21% year-over-year.

• Container shipping saw weaker-than-expected demand growth in Q3, but regional lines showed resilience; Q4 expected to benefit from seasonal demand.

• Company continues to upgrade and expand fleets, with new vessel orders and retrofits to enhance future earnings potential.