Sinking ship? COSCO profit down 53.4%

The turbulent ride was due to higher income tax expense and lower profit contributions from dry bulk shipping and shipyard operations.

COSCO said net profit attributable to equity holders of the Company decreased 53.4% from $ 68.4 million in Q2 2010 to $31.9 million in Q2 2011.

The increase in income tax expense by 74.0% to $25.0 million was mainly due to lower tax-exempt shipping profits and a deferred tax benefit adjustment due to lower deferred tax benefit recognised.

According to the company, the concessionary tax rates were reduced to 15% under the recently approved local tax incentive scheme granted to some of the subsidiaries of COSCO Shipyard Group. Ltd.

Turnover from dry bulk shipping and other businesses decreased 63.5% from $38.9 million in Q2 2010 to $14.2 million in Q2 2011 as the current short-term rates were significantly lower than the more favorable charter rates received in Q2 2010.

Meanwhile turnover from shipyard operations increased by only 6.3% to $ 981.8 million in Q2 2011 from $923.5 million in the same period last year.

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