Cosco Shipping Energy Transportation (CSET) announced that it has received a government subsidy of USD 54.9 million under the scrap-and-build policy.
The subsidy is part of revenue-related government grants and is aimed at compensating for relevant expenses or losses already incurred by the enterprise.
“It is expected that the subsidy will have a positive impact on the profit and loss of the group for 2017,” CSET stated.
CSET, the LNG and oil shipping operator of China Cosco Shipping Corporation (Cosco Shipping), said the subsidy amount will be recognised as a non-operating income and accounted into its 2017 financial year. Additionally, CSET said it has achieved a net profit of USD 130 million for the first six months of this year.
Beijing introduced the scrap-and-build policy back in December 2013 to subsidise owners scrapping vessels ahead of their operational lifespan, and to build a new one as replacement. The policy is due to expire on 31 December 2017, after a two-year extension from its original expiry year in 2015.