China Shipping Container 2007 net profit up 397 pct on cargo volume growth

China Shipping Container Lines Company Ltd (SHA 601866; HK 2866) said 2007 net profit rose 396.66 pct to 3.32 bln yuan under Chinese accounting standards, due to higher cargo volumes and tighter cost controls.

In its annual report filed with the Shanghai Stock Exchange, the company said loaded cargo volume in 2007 stood at 7.3 mln twenty-foot equivalent units (TEUs), up 29 pct.

Cargo volume in two key regions - the Pacific Ocean and Asia Pacific markets - rose 13.7 pct and 20.7 pct respectively to 1.628 mln TEU and 1.233 mln TEU in 2007.

The company's shipping capacity at the end of 2007 amounted to 446,037 TEUs, up 11.8 pct. Container vessels with capacity of at least 4,000 TEU accounted for 82 pct of total capacity.

The average freight rate per TEU in 2007 was 5,339 yuan, down 1.67 pct, mainly due to weak rates in backhaul cargo due to promotional efforts. These offset rising international freight rates.

The average rate for international trade increased by 4.4 pct to 7,591 yuan per TEU in 2007. In particular, rates for Europe and the Mediterranean rose 38.1 pct, helping pull up the annual international average.

Average domestic freight rates increased by 155 yuan per TEU to 1,568 yuan in 2007.

Operating revenue rose 26.6 pct to 39.13 bln yuan in 2007, while operating costs were up 17.2 pct at 33.78 bln.

Earnings per share came in at 0.362 yuan in 2007, against 0.074 a year earlier.

Under Hong Kong accounting standards, the company booked operating revenue of 38.83 bln yuan, up 27.3 pct, while net profit rose 274.2 pct to 3.22 bln yuan.

For 2007, the company plans to pay a cash dividend of 0.4 yuan for every 10 shares held.

CSCL said it remains cautiously optimistic about the container shipping market in 2008, despite uncertainty over the US economy, Asia-Pacific regional trade and fuel prices.

Shipping capacity at the end of 2008 is expected to hit 512,361 TEUs, up 14.9 pct.

CSCL has also ordered eight large container vessels with capacity of 13,300 TEU each from Samsung Heavy Industries Co Ltd. The vessels are expected to be delivered between 2010 and 2012.

The company also projected cargo volume in 2008 to rise by 12.7 pct to 8.23 mln TEUs. Meanwhile, operating revenue and operating costs are expected to rise 8.7 pct and 17.2 pct respectively to 42.5 bln yuan and 39.6 bln.

Source: Trading Markets.com