Cosco Pacific Boosts First-Half Profit 82% as Economic Rebound Spurs Trade

Cosco Pacific Ltd., Asia’s third- largest container-terminal operator, said first-half profit rose 82 percent on recovering world trade and the sale of a stake in a logistics venture.

Net income rose to $189.9 million, or 7.96 cents a share, from $104.5 million, or 4.66 cents, a year earlier, the terminal operator said today. The company made an $84.7 million gain from selling its stake in Cosco Logistics Co. to its parent.

Cosco Pacific’s container traffic rose 19 percent in the period as a revival in consumer spending prompted retailers to restock Asian-made goods. Global container port volumes may rise 12 percent this year, with growth led by China, according to Alphaliner, a shipping-data provider.

“Container operations rebounded in the first half as trade recovered,” said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. “Europe and U.S. demand is showing some uncertainty and that may slow growth at ports in the second half.”

Cosco Pacific rose 0.4 percent to close at HK$10.32 in Hong Kong. The stock has gained 3.9 percent this year, compared with a 5.6 percent decline for the benchmark Hang Seng Index.

The company recommended an interim dividend of 13.7 Hong Kong cents, compared with 14.4 Hong Kong cents a year earlier, and said it plans a special interim dividend of 11.1 Hong Kong cents. First-half sales climbed 40 percent to $222.7 million.

Cosco Pacific’s terminal operations handled 22.4 million 20-foot equivalent boxes in the first six months. Excluding profit from Cosco Logistics, net income rose 20 percent to $105.2 million, the company said.

Container Throughput

Container throughput at the company’s terminals will likely rise more than 10 percent in the second half, Vice Chairman Xu Minjie told reporters in Hong Kong. Port handling charges are also rebounding with increased container demand, he said.

“There’s room for us to revise upwards tariff rates at our ports,” Xu said. “Port handling tariffs are recovering and it’s near the peak levels seen in 2008.”

The company, a unit of China Cosco Holdings Co., owns or has stakes in 27 terminal operators in China, Hong Kong, Singapore, Belgium, Greece and Egypt.

Cosco Pacific will continue to seek acquisitions in China and overseas, especially in emerging markets such as Southeast Asia, South America and Africa, Xu said.

Hutchison Whampoa Ltd.’s port unit, the world’s largest container terminal operator, said Aug. 5 first-half profit rose 35 percent. Hutchison Port Holdings Ltd.’s first-half earnings before interest and taxes climbed to HK$6.1 billion ($784 million) from HK$4.49 billion a year earlier.

To contact the reporter on this story: Wing-Gar Cheng in Hong Kong at wgcheng@bloomberg.net

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