SHANGHAI Haixing Shipping's share price plummeted more than 20 per cent yesterday to a record low of 82 cents after the announcement of a daunting interim result last Friday. The state-owned shipping company, which listed as an H-share on the Hong Kong stock exchange last year, saw its share price sink by 26.8 per cent yesterday. Selling pressure came in response to the disappointing interim results, under which the company recorded a 72.7 per cent drop in attributable profits for the year to June. Net profits stood at 50.5 million yuan (about HK$46.97 million) against 185 million achieved in the same period a year ago. The profits were mainly derived from selling company assets rather than from the core shipping business. The company sold seven older vessels, of which four were dry bulk carriers and three oil tankers, with a total 150,000 deadweight tonnes during the period. The sales contributed to about 80 per cent of the net profit for the first half. Four to five more vessels would be sold for the second half. Executive director and vice-president Zhang Jieming said the downturn in profits was because of a fall in demand for industrial coal in China and higher running costs. Mr Zhang said the shipping business was adversely affected by China's austerity measures, which led to a slowdown in coal consumption in both domestic and industrial sectors and a subsequent fall in cargo shipments for industrial coal. The company's core business came from transportation of coal, oil and other mineral ores, he said. Although the volume of oil transport increased 2.2 per cent over the period, the total volume of domestic shipments dropped nine per cent. Turnover for domestic shipments fell from last year's 902.1 million yuan to 857.8 million, representing a 4.9 per cent drop. The volume of coal transported for international markets increased by 36.8 per cent and for oil 48 per cent. The total volume of international shipments increased by 28.3 per cent, from last year's 452.7 million yuan to 580.7 million. Because domestic cargo shipments have an average profit margin five times higher than international counterparts, expansion in international routes failed to offset losses in the China cargo markets.