Shanghai port operator signals dark clouds ahead for industry

By Keith Wallis in Hong Kong - Friday 3 April 2009

SHANGHAI International Port (Group), which operates China’s largest container port, has warned that 2009 will be “the toughest year in recent memory for the port and shipping industries”. 

The dire forecast was issued as the port group saw a 17.5% slump in fourth-quarter net profit to Yuan697m ($102m), down from Yuan845m in the fourth quarter last year. 

While the result dented the port company’s full year’s performance, SIPG was still able to report a 27% surge in net profit for 2008 to Yuan4.6bn on an 11% rise in turnover to Yuan18.1bn. By comparison, the company reported a net profit of Yuan3.6bn on revenue of Yuan16.3bn in 2007. Net profit last year was buoyed by Yuan670.7m it received as a land compensation payment although it did not give further details. 

SIPG pointed out that it handled 28m teu last year, up 7%, of which the Waigaoqiao container terminal handled 15.4m teu and Yangshan deep water port processed 8.2m teu. But the company missed its target of handling 28.5m teu. 

SIPG, which is 44.2% owned by Shanghai municipal government and 26.5% by China Merchants International Terminals (Shanghai), has already diversified into bulk cargoes and other businesses. 

The firm said this trend would continue as it responded to the downturn in the box trades. 

The box business was the largest contributor to revenue, generating almost Yuan9.1bn. But showing the diversification that had already taken place, port services contributed Yuan4.4bn, or 24% of revenue, while port related logistics generated Yuan3.1bn and dry bulk cargo Yuan2.1bn. 

The second phase of the port company’s Luojing dry bulk terminal started operations last July. The Yuan3.9bn facility comprised nine deepwater and 24 transhipment berths. 

SIPG also spent Yuan1.7bn on the Yuan5.7bn Shanghai Port international cruise terminal last year which it aimed to complete this year.
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