Cosco signs stake deals at four port facilities
Cosco Pacific has signed a series of deals that will give it a stake in four mainland port projects, including the controversial Nansha port in Guangzhou.
Cosco Pacific, the port operating arm of the mainland's largest ship-owning company, China Ocean Shipping Group, also announced 33.6 per cent growth in net profit for last year, as growing trade bolstered demand for sea freight through its terminals.
Net profit rose to US$206.29 million for the year to December, as throughput at its terminals worldwide increased almost 40 per cent to 23 million teu (20-foot equivalent units)
Cosco Pacific's container leasing business also contributed to its earnings growth, with container use approaching 100 per cent throughout the group.
Its container fleet grew 13.6 per cent last year to 919,128 teu.
Executive vice-chairman Liu Guoyuan told reporters that the company had signed letters of intent with the authorities in Ningbo, Nanjing, Tianjin and Nansha to invest in and operate terminals at their respective ports.
The projects include a 30 per cent stake in a four-berth terminal at the Tianjin port and a 20 per cent stake in a five-berth terminal at Ningbo in Zhejiang province. The two terminals are expected to begin operations in late 2007.
Cosco Pacific has also agreed to take 20 per cent of an operational five-berth terminal in Nanjing.
In Guangzhou, the firm will take up a 35 per cent to 40 per cent stake in the second phase of Nansha port, which aims to start operating in the first half of next year.
While Mr Liu would not reveal the size of the four investments, he said the company planned to invest about US$350 million in expanding its terminal portfolio this year.
Guangzhou municipal authorities have long wanted a larger share of the southern China freight market for the Nansha port, despite a dearth of cargo in the port's hinterland.
Chairman Wei Jiafu said the company would invest more in port operations this year after mainland trade grew more than 30 per cent last year.
Mr Liu said the company was 'confident it would be able to sustain its rate of growth this year'.
Cosco Pacific will pay a final dividend of 24.6 cents a share, against 18 cents previously.
The stock yesterday fell 1.43 per cent to close at $17.15.
