September 08, 2008

China Railway Group 2007 profit up by 92% on construction boom

It is reported that China Railway Group Ltd, Asia's largest construction contractor 2007 profit soared by 92.2% helped by the building boom in the world's fastest-growing major economy.

China Railway Group Ltd said its net income jumped to CNY 3.16 billion or CNY 0.24 per share based on domestic accounting standards. Revenue rose 13.2% to CNY 180.5 billion. Its newly signed contracts were valued at CNY 248.5 billion up by 25.8% YoY more than a year ago.

China Railway Group Ltd said, citing Ministry of Railway's statistics that China's investment in railway construction reached a record high of more than CNY 250 billion last year increase by CNY 43.2 billion more than a year earlier,

Mr Shi Dahua China Railway's chairman said in the statement that "The nation's robust economic growth would continue this year to boost demand for domestic infrastructures, in particular the transport. He noted China planned to invest a total CNY 3.8 trillion in transport infrastructure construction in the 11th Five-Year Period.

According to the statement during the five years, the government was expected to invest CNY 1.25 trillion in railway building and CNY 170 billion in inner-city rail construction. The statement said investment in highway construction was forecast to hit CNY 140 billion annually in the coming years through 2010 and CNY 100 billion before 2020.

China Railway, however acknowledged it also faced challenges, including the increasing fierce market competition, rising raw materials prices and uncertainties over the global economy and politics.