China Merchants first half profit increases 102.5pc to US$116 million

HONG KONG`s China Merchants Holdings (International) has posted 102.5 per cent first half net profit increase to HK$3.9 billion (US$116.2 million) year on year, drawn on revenues of HK$20.8 billion, up 71.8 per cent.

Company ports handled 27.61 million TEU in the first six months, an increase of 10.8 per cent from 24.93 million TEU in the same period of 2010, said the statement to the Hong Kong stock exchange.


Among the major ports in mainland China, those in the Yangtze River Delta and the Bohai Rim maintained double-digit container throughput increases in the first half while ports in western Shenzhen suffered a 0.6 per cent drop.


During the first half, the throughput handled in mainland China was 24.38 million TEU, an increase of 11.2 per cent year on year, despite the slight decline at western Shenzhen ports.


Additionally, its Hong Kong and overseas ports handled a total container throughput of 3.23 million TEU, an increase of seven per cent year on year.


For bulk cargo operations, its ports totally handled 160.51 million tons in the first half, growing 18.5 per cent against the 135.39 million tons handled in the same period of last year.


Company chairman Fu Yuning said container volume growth declined year on year in the first half of 2011 due to the "combined effects of global macroeconomic slowdown and market turbulence."


Looking ahead, China Merchants said it maintains a cautious and prudent approach to the global economic environment in the second half of 2011, but still expects a year-on-year growth in 2011.


Said Dr Fu: "Although prospects of economic recovery for the US and Euroland in the short term are limited, emerging economies have in the meantime been growing rapidly while the ASEAN has surpassed Japan as China`s third largest trade partner, and China`s foreign trade is expected to maintain a steady growth momentum."


He believes that China Merchants will benefit from China`s endeavour to enlarge the domestic market. "Adjustments characterised to structurally develop China into a domestic demand-led economy are expected to gradually bear fruit and such new economic landscape will in the medium to long term create development opportunities for the Group`s ports operation."


But he was less optimistic about western economies and said "global economic recovery will be tough and drawn-out", because of uncertainties regarding the development of European sovereign debt crisis in the second half of the year, and the risk of a continued US sovereign credit rating downgrade.