Bloomberg reported that Sinotrans Shipping Ltd the dry bulk arm of China third largest shipping group H1 profit declined by 66.4% after rates plunged amid rising overcapacity.
Sinotrans said its net income dropped to USD 64 million from USD 190.8 million a year earlier. Sales fell 49% to USD 119.5 million.
Mr Geoffrey Cheng a Hong Kong-based analyst at Daiwa Institute of Research said “2009 is a record year for new deliveries. There is a chance demand may rebound for the rest of the year, but it’s unlikely to be that high.”
Sinotrans said in a statement that the shipping market has weathered the worst period and it will maintain in a positive situation as the world economy picks up gradually although substantial volatility is still inevitable. It said scrapping of old vessels and the cancellation or delay in delivery of some new orders will help offset the overcapacity in the shipping market.
Sinotrans Shipping, a unit of China National Foreign Trade Transportation Corp rose 1.3% to close at HKD 3.91 in Hong Kong trading recently. The stock has doubled this year compared with a 46% gain in the benchmark Hang Seng Index.
The statement said dry bulk shipping sales dropped 49% to USD 109 million and oil tanker shipping sales dropped 87% to USD 5 million in the H1 from a year earlier. Container shipping sales rose 49% to USD 10.7 million.
The shipping line plans to cut its interim dividend to 2 Hong Kong cents per share from 10 cents a year earlier.
(Sourced from Bloomberg)
