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SCMP Reporter

IMPROVED freight rates helped Wah Kwong Shipping Holdings record a 41.4 per cent increase in net profit for the year to March 31, to US$52.6 million from $37.2 million a year ago.

  Operating profit rose 33.6 per cent, from $40.15 million to $53.66, on a turnover of $133.56 million, up slightly from $133.35 million.

  The group is not liable for taxation in Hong Kong or overseas.

  Earnings per share were 41 cents, up from 29 cents.

  Operating costs dropped 14 per cent, to $79.9 million from $93.2 million, on the sale of 11 older ships.

  The directors have recommended a final dividend of 5.5 US cents, up 10 per cent, making a total of seven cents for the year.

  In March, the company bought 30,000 of its own shares for HK$402,000.

  Managing director George Chao said the retained profit of US$43.7 million would be used to finance the company's continuing newbuilding programme.

  During the year, the company took delivery of five newbuildings and placed orders for seven with Chinese and Japanese yards.

  Four 27,000 deadweight tonne (dwt) handysize bulk carriers, being built in Shanghai, are to be delivered between the first quarter of next year and early 1997.

  Two 44,000 dwt product carriers are being built at the Dalian Shipyard to be delivered next year, and one 150,000 dwt bulk carrier is being built by Kawasaki Heavy Industries to be delivered early next year.

  Employment has already been arranged for four of the ships on order.

  Mr Chao said all vessels built before 1981 had been sold, reducing the average age of the fleet from about 13 years to about seven years.

  He said it was intended to continue the policy of selling older vessels and ordering new ones to ensure that the fleet remained competitive. The size of the fleet would be maintained at about 30 vessels.

  Macauport, majority owned by the group, continued to operate profitably.

  The feeder service between Taiwan, Hong Kong, Zhuhai and Macau, commended earlier this year, should improve the results of Macauport in the 12 months to March next year, Mr Chao said.

  The group's oil terminal and depot adjacent to the container terminal in Macau would begin commercial operations soon, after which the existing oil depots would be closed. This would give the group a monopoly over the oil distribution business in Macau.

  Mr Chao said the rising yen had reduced the number of tankers repaired in Japan.

   The number of tankers to which Wah Kwong Dockyard provided tank cleaning services at Zhoushan in China before they headed for Japan had been reduced.

  As a result, the group was considering opening more such facilities in other parts of China, including Hainan Island, to take advantage of the increasing number of vessel repairs being carried out in Singapore.

  Site formation work had started on the Wah Kwong Aoshan Petroleum Terminal in China and the group was holding talks with potential Chinese and overseas partners to form a joint venture to develop the complex.



Wah Kwong comes in with 41pc rise