China Merchants Profit up 29pct
While China’s ports continue to face growth pressure, the country’s largest port operator is reaping the rewards of years of investments in overseas projects.
China Merchants Holdings (International) reported first-half net profit rose 29 per cent to HK$2.78 billion ($US 361 million) from a year ago, after throughput gains at Chinese terminals exceeded China’s overall container growth rate and traffic through overseas facilities rose at a double-digit clip.
The profit is driven by steady growth from ports and contributions from overseas greenfield projects.
Chairman Li Jianhong said he expected the growth of mainland operations to slow, but noted an overall growth in the second half can be sustained.
By the end of June, the company handled a total container throughput of 41.35 million 20-foot equivalent units, up 5.3 percent. However, the container throughput in Hong Kong and Taiwan fell 18.8 percent due to the upgrading of operating system of Modern Terminals Limited. Li expects overseas business to account for 20 percent of total revenue this year.
Li Jianhong said, "Benefited by contribution from overseas ports, in particular the Sri Lanka project, container throughput handled during the first half of 2015 rose 5.3% year-on-year to 41.35 million TEUs. Notwithstanding the challenging external environment where global economy is growing at a slower than expected pace and where China's trade growth is decelerating, profit from the Group's core ports operation continued to expand steadily, as contributed to, on one hand, the Group's dedicated efforts in facilitating the transformation and upgrade of its terminals, which helped in optimizing resources allocation, improving asset's efficiency, synergizing existing operations and encouraging innovation; and on the other, factors such as the increasing investment return derived from the Group's overseas ports."
“China’s port industry would continue to be hampered as growth continued to slow owing to challenging external and domestic economic conditions,” the company said in an interim report. “With steady expansion in its overseas projects, the performance of our ports operation seen in the first half is expected to sustain throughout the rest of the year.”
