START-UP costs of new operations in Asia, China and the United States pushed freight forwarder BALtrans Holdings' profits down 13.03 per cent to $37.52 million in the year ended July. Chairman and chief executive Anthony Lau Siu-wing said: 'The freight forwarding industry is suffering from excess capacity which led to a fall in prices and narrower profit margins.' The results included an exceptional loss of $3.46 million, provisions for bad debts for a customer in the United States. Turnover rose 27.83 per cent to $809.12 million from $632.97 million. Earnings per share fell to 18.2 cents from 21.3 cents. A final dividend of six cents a share, against 6.2 cents previously, will be paid. Mr Lau said strong economic activity in the Asia-Pacific region and the expansion of the group's network were the main factors behind the improved performance. The higher turnover was due to increased air freight business between Hong Kong and North America following the acquisition of an 80 per cent stake in Supreme Air Freight. 'The acquisition significantly strengthened links between our two most important markets, Hong Kong and the United States,' Mr Lau said, adding that the group had opened a branch in Chicago. The group also boosted its US presence with the formation of a sea freight joint venture with Aempac System in August. Mr Lau said the China market had proved difficult because of a slowing of exports due to reductions in duty refunds which had a knock-on effect on the air freight industry. Many freight forwarding companies continued to face problems in collecting trade debts, he said, adding that the group's policy was to concentrate on nominated business with freight charges payable overseas. The group accepted only a selected amount of business where charges were payable within China, he said. 'Short-term market difficulties in China are likely to be offset by improved business conditions and opportunities in other countries,' Mr Lau said. The group has strengthened its presence in Singapore with Air Cargo Novo becoming a wholly owned subsidiary of Wilson Freight (Far East), a joint venture with Swedish Bilspedition. Mr Lau said the group would continue to expand its international network.