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Recession takes 17% bite out of China Merchants profits in second half of 2008

Recession takes 17% bite out of China Merchants profits in second half of 2008

Hong Kong: China Merchants Holdings (International) Co has seen a 17% profit drop in the second second-half of 2008 as exports plunged amid the global recession, writes Bloomberg.Net income dropped to HK$1.69bn ($218m) from HK$2.03bn a year earlier, based on annual results announced today, while sales plunged 77% to HK$770m PSA International Pte and Cosco Pacific Ltd. have also had profit drops as U.S. and European consumers cut back spending on Chinese-made goods amid rising job concerns. Chinese exports have fallen for five straight months, causing volumes to plunge at terminals and forcing shipping lines to make vessels and containers idle.

"There are more and more empty boxes out there," a Jim Wong, a Hong Kong-based transport and infrastructure analyst with Nomura Holdings Inc told the newswire. "Rates are also dropping as domestic consumption will account for more revenue this year."

Last year, the company boosted full-year container volume 7% to 50.5m boxes, it said in a Hong Kong stock exchange statement today. Traffic at mainland ports it has investments in, including Shanghai, Shenzhen and Tianjin, grew 9% to 43.6m boxes. The company's full-year profit increased 4.5% to HK$3.7 billion, helped by surging trade in the first half of the year and the sale of stakes in ventures including a paint-making company.

"The outlook for China's foreign trade in 2009 remains highly uncertain," Chairman Fu Yuning said in the statement. The company will "step up efforts to explore the domestic trade-related container market," he maintained  [20/04/09]

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