China Shipping Development Co., the dry-bulk arm of the nation’s second-biggest shipping group, said profit plunged 80 percent last year as overcapacity hammered rates.
Net income dropped to 1.07 billion yuan ($156 million), from 5.37 billion yuan a year earlier, the company said in a statement to the Hong Kong stock exchange today. That was lower than the 1.24 billion yuan median of 11 analysts’ estimates compiled by Bloomberg.
Pacific Basin Shipping Ltd. and Sinotrans Shipping Ltd. also reported lower profits for last year as expansion in the dry-bulk fleet outpaced Chinese demand for shipments of iron ore and coal. The Baltic Dry Index, a measure of rates, averaged 59 percent lower in 2009 than a year earlier.
“2010 will the peak year for delivery of new vessels for the shipping industry when the issue of excess shipping capacity in the market will remain prominent,” the company said in today’s filing.
Dry-bulk, container and tanker markets will all likely rebound this year as the economy revives, Li Shaode, chairman of China Shipping Development, said on March 3. China Shipping Group Co. plans to add four dry-bulk vessels this year to support a contract to haul iron ore for steelmaker Shougang Corp.
“In general, the shipping market is expected to be slightly better in 2010 compared with 2009,” the results statement said.
Dry-Bulk Drops
The shipping line rose 1 percent to HK$13.36 in Hong Kong trading on March 26. The stock has gained 14.6 percent this year, beating a 3.8 percent drop for the city’s benchmark Hang Seng Index.
Sales at the company’s dry-bulk operations fell 61.3 percent last year and cargo-ton miles declined 23.8 percent, according to the statement. Oil-tanker revenue dropped 18 percent, while oil cargo-ton miles rose 21.4 percent.
Net income dropped to 1.07 billion yuan ($156 million), from 5.37 billion yuan a year earlier, the company said in a statement to the Hong Kong stock exchange today. That was lower than the 1.24 billion yuan median of 11 analysts’ estimates compiled by Bloomberg.
Pacific Basin Shipping Ltd. and Sinotrans Shipping Ltd. also reported lower profits for last year as expansion in the dry-bulk fleet outpaced Chinese demand for shipments of iron ore and coal. The Baltic Dry Index, a measure of rates, averaged 59 percent lower in 2009 than a year earlier.
“2010 will the peak year for delivery of new vessels for the shipping industry when the issue of excess shipping capacity in the market will remain prominent,” the company said in today’s filing.
Dry-bulk, container and tanker markets will all likely rebound this year as the economy revives, Li Shaode, chairman of China Shipping Development, said on March 3. China Shipping Group Co. plans to add four dry-bulk vessels this year to support a contract to haul iron ore for steelmaker Shougang Corp.
“In general, the shipping market is expected to be slightly better in 2010 compared with 2009,” the results statement said.
Dry-Bulk Drops
The shipping line rose 1 percent to HK$13.36 in Hong Kong trading on March 26. The stock has gained 14.6 percent this year, beating a 3.8 percent drop for the city’s benchmark Hang Seng Index.
Sales at the company’s dry-bulk operations fell 61.3 percent last year and cargo-ton miles declined 23.8 percent, according to the statement. Oil-tanker revenue dropped 18 percent, while oil cargo-ton miles rose 21.4 percent.