CMHC Will Not Rest on Their Laurels

The 2014 is shaping up to be a good year for China Merchants Holdings (International) Company Limited, if their interim results for the period ended June 30, 2014 are anything to go by. The latest results reveal an increase in volumes across the board, but the company still remains cautiously optimistic about the second half of the year.

The highlights of the company’s interim results are:

• Container throughput handled rose 18.1% year-on-year to 38.52 million TEUs (1H 2013: 32.63 million TEUs);
• Total bulk cargo volume handled was 181 million tonnes (1H 2013: 177 million tonnes), a year-on-year increase of 2.6%;
• Profit attributable to equity holders of the company was up 11.1% year-on-year;
• Recurrent profit attributable to equity holders had a year-on-year increase of 15.7%;
• Profit derived from the core segment of ports operation was up 14.6% year-on-year;
• Ports operations recorded an EBITDA increase of 9.3% year-on-year;
• Basic earnings per share  increased 7.5% year-on-year.

Looking on to the second half of the year, CMHC states that with global trade regaining its growth momentum, the performance of the global ports industry in the second half is likely to outperform that of the first half. However, amid the trend of further allying among the major shippers and with more mega vessels being deployed, port industry will surely be presented with both market opportunities and considerable challenges.

Those market challenges are primarily derived not only from the uneven distribution of ports resources that impact the operational behaviour of the ports at the region, but also from the allying of shipping liners and deployment of mega vessels which necessitate the upgrading and restructuring of port infrastructure and facilities, according to the Group.

Furthermore, the increase of operational costs, in particular the labour cost, will possibly add pressure to the growth of profit going forward. The above mentioned factors are the reasons behind the Group saying that it remains to be cautiously optimistic towards the outlook for second half.

Li Jianhong, Chairman of the Board, said: ”Global economy has been steadily recovering during the first half of the year, though at a slower-than-expected pace. Looking forward to the second half of the year, uncertainties surrounding global economic growth, along with the intensifying consolidation and competitions in the international maritime industry, as well as the rationalisation in alliance formation and deployment of more mega vessels, the Group’s ports operation is expected to new opportunities as well as challenges.

We are confident that, through clearly visualising the conditions prevailing, endeavouring to steadily progress, dedicating efforts in enhancing the capital structure, facilitating the creation and development of synergies between the domestic and international operations, balancing short-term benefits and longer-term sustainable growth, and maintaining its sound financial policy, we would be able to navigate the Group’s business sustainably forward, to and, in turn, deliver better investment return for shareholders.”