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Cargo shipping line's profit up
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08:23, April 03, 2008

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China Shipping Container Lines Co, the country's second largest cargo-box carrier, more than tripled 2007 profit after raising prices and hauling more goods from Asia to Europe and the US.

Net income climbed to 3.22 billion yuan, or 0.34 yuan a share, from 859.2 million yuan, or 0.09 yuan, a year earlier, the Shanghai-based shipping line said in a Hong Kong stock exchange statement yesterday. Sales jumped 27 percent to 38.83 billion yuan.

China Shipping raised rates on routes to Europe and the Mediterranean 38 percent last year as exports of clothing, toys and furniture surged. The company and larger rival China COSCO Holding are also carrying more goods domestically as congestion and higher gasoline prices erode the advantages of moving goods by truck.

"The outlook is pretty optimistic," said Geoffrey Cheng, a Hong Kong-based analyst at Daiwa Institute of Research, before the earnings announcement. "Domestic demand is very strong and the market has overestimated the impact of the US slowdown."

The shipping line's shares surged in Hong Kong and Shanghai. The mainland stock has risen 3.9 percent since it began trading in December, compared with the benchmark CSI 300 Index's 32 percent decline.

China Shipping's container volume rose 29 percent last year to 7.3 million. Volumes on domestic lines gained 61 percent, European shipments rose 7.9 percent and transpacific shipments rose 14 percent.

The company raised 15.5 billion yuan in its Shanghai stock sale to expand its fleet as rising demand for Asian-made goods in Europe and the US boosts shipping volumes.

Higher rates, fuel hedging and the introduction of larger ships helped China Shipping mitigate the impact of rising fuel prices. The company's cost of service per container fell 7 percent last year even as the price of bunker fuel, used by ships, rose 71 percent in Singapore trading.

Source:China Daily/Agencies

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