Profits fall at China Merchants port operations despite throughput growth

China Merchants Port Holdings

Hong Kong-listed China Merchants Port Holdings saw net profit fall 39.2% to HK$1.69bn during the interim period ending 30 June 2016.

The company’s main focus of port operations recorded net profit at HK$2.07bn, down 14.3% from HK$2.41bn a year before. But the poor interim showing of subsidiary China International Marine Containers proved a drag on China Merchants overall bottom line.

During the period China Merchants handled 46.07m teu, up 11.1%. At the same time bulk cargoes handled grew 24.9% to 218m tonnes. The company’s ports in Mainland China delivered, container throughput of 34.48 million TEUs, or an increase of 13.2% year-on-year, which was mainly attributable to the additional contribution from a new acquisition investment of Dalian Port (PDA) Company Limited.

In the first half of the year, Modern Terminals Limited and China Merchants Container Services Limited in Hong Kong delivered a combined container throughput of 2.26m teu, down slightly by 1.3% year-on-year, which outperformed the Hong Kong market.

Addressing future prospects, the company said: “Considering the macroeconomic environment in China and overseas, the Group is of the view that, China’s port industry will continue to grow, yet at a milder pace. It is expected that China’s export in the second half of the year will be supported by a number of factors, including the facilitation of “One Belt, One Road”strategy and the cooperation over infrastructure build-ups under the concept of “China +”, as well as the traditional peak season that takes place in the second half of the year.

In addition, with support lend from the steady growth delivered by emerging economies such as South Asia and East Africa, the performance of the Group’s ports operation in the second half is expected to be better than that of the first half of the year.

For the second half of 2016, guided by the already-established operation philosophies, the Group will continue to steadily expand its overseas operation, facilitate the integration of resources for assets in China, accelerate the transformation and upgrade of homebase port, intensify its efforts to refine its management system, as well as enhance the return of its existing assets. Meanwhile, the Group will also increase its efforts in promoting business innovation, and explore and nurture new business and profit growth.

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