Singapore-listed Cosco Corp’s first half net profits fell 67% on higher costs and a difficult business environment for its Chinese shipyard business.

Cosco Corp, which owns 51% of Cosco Shipyard Group, reported a first half net profit of S$70.2m ($48.9m), down 67% on the same period in the previous year. The company’s revenues fell 19% to S$1.4bn.

Shipbuilding, shiprepair and conversion, which accounts for 94.8% of Cosco Corp turnover, saw revenues fall 30.4% to S$681m in the second quarter of the year compared to the same period in 2008.

The company said its profitability was hit by higher operational costs and a difficult business environment for its shipyard business. CSG owns and operates six shipyards in China.

Cosco Corp vice-chairman Jiang Li Jun said the company expected further challenges amid an uncertain economic outlook.

“Our group’s shipbuilding order flow and shiprepair and conversion business volumes are expected to remain subdued until any pickup in global trade and economic activities takes hold,” he said.

CSG’s orderbook at the end of June this year was $6.8bn, but this figure does not include the impact of $298.7m in supramax bulker orders cancelled by subsidiaries parent Cosco group in mid-July.

“This orderbook is subject to revision from any cancellation of orders or new orders that may arise,” the company said.