CSCL forecasts 50% profit plunge

http://www.lloydslist.com/ll/news/viewArticle.htm?articleId=20017610612&printable=true

CHINA Shipping Container Lines warned of more than a 50% drop in profit in 2008.

The company issued a profit warning last night that its net profit for last year could fall to Yuan1.66bn ($243m) or lower.

CSCL, the country’s second largest container shipping line by capacity, earned net profit of Yuan 3.32bn in 2007.

“In 2008, the volume of container loaded cargoes exported from China decreased significantly, the traditional peak season for cargo volume did not appear and the loading rate of container vessels dropped sharply,” said the company in a statement.

“At the same time, the price of crude oil kept soaring in the first half of ’08, which caused the operation costs of liner shipping companies to be maintained at a high level, together with the failure to smoothly implement each of the plans to increase freight rate, resulted in a sharp reduction in operating profits.”

CSCL posted a net loss of Yuan271.66m for the third quarter last year, although the company said it saw a net profit of Yuan426.99m for the first nine months of last year. There were no comparable results for 2007.