Cosco has profited from brisk demand at its China shipyards where it converts single-hull tankers to double-hull following changes in maritime regulations.
While the price for shipments of dry bulks such as coal, grains and ore has dropped sharply this year, it is still well above the level at which analysts believe Cosco can break even.
The Singapore-listed company, majority-owned by China Ocean Shipping Co, said third-quarter net profit was S$56.6 million ($33.4 million), up from S$11.3 million a year ago. Profit was boosted by a one-off gain of S$16 million from a ship sale.
Quarterly sales rose more than sevenfold to S$235 million, 80 percent of which were generated at its shipyards - its main money spinner.
The profit jump comes after bumper earnings last year, when profits nearly trebled. According to the average of nine analyst forecasts compiled by Reuters Estimates, Cosco Corp (Singapore) Ltd's net profit for the whole of 2005 is expected to more than double, increasing 110 percent to around S$140 million.
Speaking to Reuters on the sidelines of a results briefing, Cosco Corp Chief Executive Ji Hai Sheng indicated that profit in the final quarter of 2005 may be weaker than in the previous two quarters due to wintry conditions in north Asia.
"The second and third quarters are usually better than the first and fourth quarters," he said. He added that increased business in its ship repair business could make up for the seasonal weakness.
Based on the full-year forecast of analysts polled by Reuters Estimates, minus the nine-month profit reported on Monday, Cosco's fourth-quarter net profit is estimated at S$18 million.
That compares with a fourth-quarter profit of S$25 million a year ago, obtained by deducting the nine-month profit from the full-year result.
Shipping rates for dry bulk such as grains, coal and iron ore have recovered somewhat from their August low but are still less than half the level seen a year ago, adding to investor concerns about a slowdown in the global shipping industry.
But despite such fears, Cosco's share price has doubled in value this year thanks to the firm's ship repair and conversion business, its main growth driver.
Cosco shares trade at 18.6 times 2005 earnings. The shipping and ports sector trades at an average price-earnings ratio of 15.
Singapore-listed rival STX Pan Ocean is valued at just 2.8 times forecast earnings. The South Korean firm's stock had an encouraging market debut, rising 25 percent after its July listing, but is now trading below its S$0.90 issue price.
The Baltic Dry Index, which tracks bulk shipping rates, has fallen from a high of more than 6,200 points in December to less than 1,800 three months ago.
The index stood just below 3,000 points on Monday, still well above Cosco's breakeven rate which analysts estimate to be around 1,000.