Cosco Shipping Limited (Coscol) has booked a sharp increase in net profit for the financial year 2014, as it benefitted from cost cutting measures and government subsidies.

Profit for 2014 jumped to RMB193m ($31.2m) compared to RMB32.64m in the previous financial year. Revenue improved 3% year-on-year to RMB7.66bn.

The heavy lift arm of China’s Cosco Group said the higher earnings were attributed to increased sales, a leaner fleet and stricter control on operating costs.

The Shanghai-listed company added that the results were also boosted by government subsidies of RMB182.93m received for scrapping old tonnage and replacing them with newbuilding orders.

Coscol had earlier announced orders to construct four 28,000 dwt heavy lift vessels at Hudong-Zhonghua Shipbuilding and Shanghai Shipyard, with an option for two additional units.

The Chinese shipowner is seeking to raise RMB2.5bn through a private placement for the purpose of financing the heavy lift newbuildings and earlier orders for semi-submersibles and multi-purpose ships.

Coscol has welcomed Qianhai Kaiyuan Fund to subscribe to half of the company’s RMB2.5bn private placement, allowing the investor to become the shipowner’s second largest shareholder with a 10.6% stake.

The other half of the new shares will be issued to parent Cosco Group, which will see its stake in Coscol reduced to 50.88% from 51.12%.

Qianhai Kaiyuan Fund is 33.3% owned by the local government-run Shaanxi Coal and Chemical Industry Group.