Tianjin Port posts loss as it awaits recovery

PUBLISHED : Thursday, 27 August, 2009, 12:00am
UPDATED : Thursday, 27 August, 2009, 12:00am

Tianjin Port Development's empty container boxes would remain a drag on company profits in the second half, since export and import trade showed no sign of strong recovery, management said yesterday.

The company posted a net loss of HK$15.85 million in the first six months compared with a HK$140.68 million profit in the same period last year. Revenue fell 8.2 per cent to HK$571.13 million.

For the operator of the port of Tianjin, the mainland's huge stimulus measures have not been enough to offset the negative impact of collapsing international trade brought on by the global downturn.

A surge in the ratio of empty boxes, which yield just half of a laden box, dampened the profit margin of the port operator.

Shipping companies moved empty containers to the mainland from overseas to take advantage of cheaper storage fees as international trade slowed in the first half.

The level of empty boxes rose 11 percentage points year on year to 45 per cent in the first half, company managing director Zhang Jinming said yesterday.

A jump in the less profitable boxes, as well as an increase in domestic trade, has led to a 25 per cent drop in the average price to HK$228.90 per 20-foot equivalent unit (teu).

Northern ports such as Tianjin suffered more from a higher percentage of empty boxes to total lifting than in the south because of trade patterns, chairman Yu Rumin said.

Factories in the south are mainly processors with supplied materials imported from somewhere else, leading to a higher percentage of laden boxes.

Though the decline in export and import trade stopped worsening in the second quarter, the port operator still projected a lower target for full-year throughput figures for containers. Mr Yu has lowered its target to 8.5 million teu from nine million teu.

As for bulk and general cargo, the company hoped to reach its 380 million tonne target this year, Mr Yu said.

Tianjin Port suffered a 6.7 per cent drop in container throughput to 1.21 million teu and an 8.4 per cent fall in non-containerised cargo throughput to 5.97 million tonnes during the first half.

Tianjin Port's net cash inflow fell 29.5 per cent to HK$64.3 million during the first half, while consolidated operating profit margin plunged by 18.1 percentage points to 4.6 per cent.

Tianjin Port will not pay a dividend for the first half.