SITC shows how intra-Asia pays off as 2010 profits soar 248pc

HONG KONG-listed SITC International Holding Company Limited, the largest mainland-based non-state-owned shipping logistics firm, has posted a 248 per cent increase in net profit for 2010 to US$112 million.


Revenues for the year ending December 31 increased 28.4 per cent to $891.5 million up from US$694.2 million in sales in 2009.


The company's robust results show the profitability of the intra-Asia trade, a view bolstered SITC's $32 million profit made during 2009 global downturn.


Container shipping provides 60 per cent of SITC revenue and contributed $89 million to 2010 operating profit. Container revenue also includes land-based logistics, forwarding, shipping agency work and warehousing.


Strong container shipping results were attributed to 15.7 per cent increase in throughput to 1.37 million TEU over the year before, but also because last year's rates increased to $506 per TEU from $450 per TEU in 2009.


SITC completed its initial public offering on the Hong Kong stock exchange in October last year and raised $385 million from a share sale. The company has used almost $209 million of that on 11 new 950-TEU to 1,100-TEU ships to be delivered between this year and 2013.


"Revenues of our sea freight logistics business before inter-segment elimination increased 30 per cent to $694.8 million. Of which the shipping volume increased from 1.18 million TEU in 2009 to 1.37 million TEU in 2010 and contributed to an increase in revenue by 52.2 per cent," said an SITC statement.


The cost of sales of our sea freight logistics business increased by 14.8 per cent to US$583.0 because of all major components of our cost of sales except for chartering expenses.


The price of containers also increased 15.6 per cent to US$35.9 million, reflecting the rising prices of leasing. Voyage costs increased 35.5 per cent to US$175.2 million mostly because of bunker cost which increased 44 per cent.
(Source:http://www.schednet.com)