Shanghai Port Q4 net jumps 48% as trade recovers

SHANGHAI - Shanghai International Port (Group) Co, China's biggest port operator, posted a 48 percent surge in fourth-quarter net profit, halting an earnings slide as prospects improved for global trade.

"Looking forward, the outlook for 2010 generally will be better than in 2009," the company said in a stock exchange filing on Friday.

"However, the recovery of overseas economies, especially the United States and the Europe Union, remains unstable. There are still uncertainties facing global trade and the ports sector."

Shanghai port, which had reported average annual earnings growth of 35.9 percent over the five years before 2009, reported a 30 percent fall in its profit for the first nine months of last year as the financial crisis took its toll on the world economy.

But the market situation started to pick up late in 2009, helped in part by resumed export growth in China, which is on track to pass Germany as the world's largest exporter this year.

"There has been an uptrend in Shanghai Port's throughput in past months and that could well be extended into the rest of the year," said Li Guanghua, an analyst with Sinolink Securities.

From October to December, Shanghai port booked a net profit of 1.03 billion yuan ($150.9 million), compared with the year-ago profit of 697 million yuan.

Net profit for the full year came to 3.76 billion yuan, down 18.6 percent from 2008 but slightly above the average forecast of 3.72 billion yuan from eight analysts polled by Thomson Reuters I/B/E/S.

Turnover in 2009 fell 8.79 percent to 16.55 billion yuan.

Shanghai Port's shares have slipped 4 percent this year, modestly outperforming a 6.6 percent fall in China's benchmark Shanghai Composite Index.

Shipping rates

China's exports surged 17.7 percent in December from a year earlier after 13 consecutive months of decline, with further surges of 21 percent in January and 46 percent in February.

A spike in demand for goods made in China at the end of last year helped container ports in Shanghai, Hong Kong and Shenzhen to shrug off months of decline.

Although double-digit growth rates are expected for container volume in 2010, however, economic uncertainties in the developed economies could continue to weigh on shipping rates.

The China Containerized Freight Index, which takes data from most of the leading liners with operations in China, hit 1,168.31 points for the week ended Feb 26, up 17 percent from the start of this year, according to the Shanghai Shipping Exchange.

But the index has since eased to 1,127.62 points for the week ended March 19.

In 2009, Shanghai Port's container throughput fell 10.7 percent to 25 million twenty-foot equivalent units (TEU), and total cargo handled declined 1.1 percent to 365 million tons.

The port operator signed a framework agreement in September 2006 to buy 40 percent of a container terminal in Zeebrugge, Belgium, which was built by APM Terminals, part of AP Moeller-Maersk Group. But the project has been postponed amid a global industry downturn.