A container carrier is being unloaded at Tianjin Port Container Terminal. Courtesy of TPCT Ltd

HONG KONG: Tianjin Port Development Holdings Ltd yesterday reported a steep 46 percent year-on-year drop in its 2008 net profit to HK$130 million, which it blamed on sharp decline in demand for the mainland's export products amid a global recession.

As a result of a sharp slowdown in exports, Tianjin Port saw a significant contraction in the volume of its container handling operations.

The group, one of the dominant terminal operators in Tianjin, said the container handling division suffered a 2.2 percent decline in revenue.

However, revenue from the company's bulk cargo operations rose 19.8 percent year-on-year.

Total revenue rose modestly by 5.5 percent to HK$1.26 billion from HK$1.19 billion in 2007.

The company said last year's performance was also weighed by an escalation in operating and finance costs.

Cost of sales spiralled to HK$689.69 million from HK$561.7 million, while finance costs rose to HK$26.53 million from HK$3.33 million a year earlier.

To pursue growth, the group acquired last month a 56.81 percent stake in Shanghai-listed Tianjin Port Group for HK$10.96 billion.

Tianjin port, located on the Bohai Bay Rim, is the sixth largest container port on the mainland.

Revenues from container and bulk cargo business contributed 60 percent and 40 percent, respectively, to Tianjin Port Development's total revenue.

According to the Ministry of Communications, the total container handling volume at Tianjin port is 8.5 million 20-foot equivalent units (TEUs) in 2008, an increase of 19.7 percent from the previous year.

Domestic and export trade account for half of its turnover respectively, according to Tianjin Port Development chairman Yu Rumin.

Through the first quarter of 2009, Tianjin port is one of three among all ports on the mainland that posted positive growth.

The three ports - Yingkou, Qingdao and Tianjin - are all located around the Bohai Bay and recorded a rarely positive growth while the other ports in the Yangtze River Delta and Pearl River Delta suffered negative growth, according to the Ministry of Communication.

The company's chairman said that, amid depressing export demands, the company is focusing on domestic trade.

(HK Edition 04/24/2009 page3)