Shanghai International Port (Group) Co, China’s biggest port operator, posted a 39.5 percent surge in first-quarter net profit, helped by an upswing in trade in the world’s biggest exporter.
The results marked the second straight quarter of profit growth for Shanghai Port, after a string of losses brought on by shrinking Chinese exports and imports throughout most of 2009.
However Q1 profit growth was slower than the 48 percent achieved in the fourth quarter of 2009, underlining the uncertainties facing China’s trade partners as well as its own economy.
Analysts expect shipping activity in 2010 to remain robust as China’s exports recover and it imports huge amounts of raw materials to drive its economy. China is the world’s biggest exporter having surpassing Germany last year, according to the World Trade Organization.
“Shanghai Port held up pretty well in Q1. The uptrend could well be extended into the rest of the year, even though uncertainties in major Western economies still pose a potential threat,” said Li Guanghua, an analyst with Sinolink Securities.
So far, China’s trade with major global economies remains encouraging. March exports to the European Union and the United States rose 21.5 percent and 19.3 percent from a year earlier respectively, with imports up 14.5 percent and 9.5 percent.
Shanghai Port did not provide earnings guidance in a brief statement filed to the Shanghai Stock Exchange.
Its net profit came to 1.02 billion yuan ($149 million) in the first three months, up from 733.9 million a year earlier. Turnover rose 18.2 percent to 4.35 billion yuan.
During the period, Shanghai Port’s container throughput was up 15.5 percent, while total cargo handled went up 35.1 percent. The company did not provide figures on the actual volume of throughput.
The port operator signed a framework agreement in September 2006 to buy 40 percent of a container terminal in Zeebrugge, Belgium, which was built by APM Terminals, part of A.P. Moeller-Maersk Group. But the project has been postponed amid a global industry downturn.
Shanghai Port’s shares closed down 4.5 percent, roughly in line with a 4.8 percent drop in the benchmark Shanghai Composite Index. They have slipped 9.1 percent so far this year, similar to the fall in the broader market. (Reuters)