The company reported a marginal rise in H1 profits. [CFP]

The Shanghai Waigaoqiao Free Trade Zone Development Co Ltd, the largest free trade zone operator in China, yesterday reported a significant drop in first half revenue due to the dwindling foreign trade activities.

The Pudong-based State-owned company, which operates and sells industrial buildings inside the exporting zone, said its revenue from imports and exports and the logistics sector in the first half of this year was 2.21 billion yuan, a 26-percent drop over the same period of last year.

The group's overall operating revenue was 3.36 billion yuan for the six months, down 13.5 percent year-on-year, according to the interim report filed to the Shanghai Stock Exchange.

Despite the lower business turnover, Waigaoqiao's first-half profit edged up marginally by 2.9 percent, due to land transfer income from the Sunland Project, a residential area it developed within the Waigaoqiao zone.

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Waigaoqiao said lower forex losses helped reduce finance costs by 21.3 percent. The company said due to the uncertain macroeconomic conditions, the performance of the import and export and logistics sector is hard to forecast.

Shares of Waigaoqiao ended down by 8.44 percent to close at 14.22 yuan yesterday.

Between January and July, China's foreign trade fell 22.7 percent from a year earlier to $1.15 trillion, including a 22 percent fall in exports to $627.1 billion, according to recent Customs data.

Haitong Securities' analyst Niu Yuming said although the demand from overseas market is not as high as it was in 2007, the market condition have improved.