China Shipping Development Co. (1138), the commodities-carrying unit of the nation’s No. 2 shipping company, said annual profit plunged 93 percent in 2012 on slumping freight rates.
Net income tumbled to 73.7 million yuan ($11.9 million) from with a profit of 1.06 billion yuan a year earlier, the company said in a filing to the Shanghai stock exchange today. The Shanghai-based company was projected to post a net loss of 244 million yuan based on the average of 10 analysts’ estimates complied by Bloomberg. Sales fell 9.2 percent.
China Shipping Development sought to delay receiving new ships in August after slumping rates caused a net loss of 495 million yuan in the first half. Sluggish demand and excess capacity in international and domestic markets resulted in a downturn in freight rates, China Shipping said in a statement in January when it warned of a “considerable decline” in annual profit.
The Baltic Dry Index, the benchmark rate index for hauling commodities, averaged 920 last year, the lowest since 1986, according to figures from the Baltic Exchange, the London-based publisher of freight rates. The index gained 0.8 percent to 899 points in London yesterday.
China Shipping fell 0.7 percent to HK$4.16 at the close in Hong Kong trading, before the earnings were released. Its Shanghai shares also dropped 1.1 percent to 4.39 yuan today.
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