China Shipping’s profits down 11% in 2005

China Shipping’s profits down 11% in 2005    China Shipping Container Lines said that record fuel prices and port charges contributed to a 10.8 percent decline in its 2005 net profits to RMB3.58 billion ($447 million), compared to RMB4.02 billion in 2004.
   Operating income for 2005 was down 9 percent to RMB4.73 billion ($590 million), from RMB5.20 billion in the previous year. China Shipping’s revenue jumped 23.2 percent to RMB28.37 billion ($3.54 billion) after posting RMB22.36 billion in 2004.
   The Hong Kong Stock Exchange-listed carrier’s operating costs soared 38.2 percent to RMB23.33 billion ($2.91 billion)with port charges up 52 percent and stevedoring costs up 26.6 percent.
   The decreases in net and operating profits came despite significant increase in volume and revenue in all but one of its trades. During the year China Shipping carried a total of 4.6 million TEUs, up 25.8 percent compared to 3.6 million TEUs in 2004. China Shipping’s average freight rate for the year improved 0.8 percent to RMB6,049 ($755) per TEU. The carrier said the small increase to its international freight rate was affected by a downturn to freight rates during the fourth quarter to the Europe/Mediterranean and Australia trades.
   The biggest gain in revenue over the year came from the Europe/Mediterranean market with a rise of 33.8 percent to RMB10.45 billion ($1.30 billion) from RMB2.41 billion. Volumes in this trade increased 38.7 percent to 1.23 million TEUs.
   Revenue from the America market was up 30.5 percent to RMB11.34 billion ($1.42 billion) from RMB8.68 billion. Throughput in this trade was up 26 percent to 1.12 million TEUs.
   Revenue from services in the East and Southeast Asia trade rose 15.1 percent to RMB1.76 billion ($220 million) from RMB303.9 billion. Volume increased in this market 17.3 percent to 572,215 TEUs.
   The Australia market revenue increased 11.8 percent to RMB1.38 billion ($172 million) with volumes up 18.5 percent to 194,216 TEUs.
   Revenue from China domestic services was up 16.2 percent to RMB1.93 billion ($241 million) after a volume rise of 27.3 percent to 1.40 million TEUs.
   Revenue from other unidentified trades declined 3.3 percent to RMB1.51 billion ($188 million) with volumes down 39 percent to 74,562 TEUs.
   “Although the demand for container shipping maintains at a booming state, the concentrated delivery of global new additional capacity in 2006 will result in pressure on the freight rate of the major trade lanes in the shipping market,” China Shipping said.
   In 2005, 21 ships with a combined capacity of more than 95,000 TEUs joined China Shipping’s containership fleet, helping it become the world’s sixth-largest ocean carrier with an overall fleet capacity of just under 360,000 TEUs. This year, the company will receive 13 ships with a total capacity of about 64,000 TEUs.