China COSCO’s first half profit down 8%

China COSCO’s first half profit down 8% China COSCO Holdings, parent of COSCO Container Lines and majority owner of terminals operator COSCO Pacific, Monday reported an 8.4 percent drop in profit to RMB 968.7 million ($128 million) due to higher operating costs.
   First half revenue increased 17 percent to RMB 26.8 billion ($3.5 billion) helped by 14 percent higher container movement at 2.76 million TEUs.
   COSCO’s domestic China, Asia/Europe and transpacific routes all registered double-digit growth although transatlantic and Intra-Asia (including Australasia) routes showed declines.
   China COSCO’s revenue for container shipping and related businesses improved 17.7 percent to RMB 20.9 billion ($2.75 billion)
   COSCO Pacific, of which China COSCO owns about 51 percent, previously reported 8.9 percent higher profit for the first half 2007 to $148.5 million with a 23 percent rise in throughput to 18.4 million TEUs.
   'There was a persistent strong demand for container shipping (in the first half),” said Wei Jiafu, China COSCO’s chairman and chief executive officer. “We continued to implement our plans in optimizing the shipping capacity and route allocation. At the same time, we pursued the goal of ‘rise in both volume and price’ and achieved good results in this regard.
   “However, since operating costs went up comparatively fast, the group's net profit attributable to the equity holders for the period under review edged down slightly when compared with the same period of last year.
   In late June, China COSCO raised RMB 15.1 billion ($1.98 billion) from an A-share issue on the Shanghai Stock Exchange, a record high among shipping IPO’s worldwide.
   Looking ahead to the second half of this year, Jiafu said: 'The major businesses of the group will continue to benefit from the healthy development of the global economy, in particular the sustained growth of China's economy and foreign trade at a fast pace.
   “It is anticipated that the market demand for container shipping will remain strong in the second half, with the market equilibrium staying at a relatively high level for the past few years. However, we are still facing risks such as high oil prices and increasing inland transportation charges.”
   The COSCO boss added the group is looking to strengthen its terminals portfolio and add to increase its container fleet.