Oct. 22 (Bloomberg) — China Shipping Development Co., the dry-bulk arm of the nation’s second-biggest shipping group, reported an 81 percent drop in third-quarter profit as rising overcapacity hammered commodity-shipping rates.
Net income declined 81 percent to 292 million yuan ($43 million), or 0.0858 yuan per share, the company said in a statement today. Nine-month profit was 905.7 million yuan.
The Baltic Dry Index, a measure of dry-bulk rates, averaged 61 percent lower in the period than a year earlier as growth in the global fleet (Sure!) outpaced China’s demand for iron ore and other commodities. The shipping line has locked in long-term liquefied natural gas and oil contracts, offsetting the dry-bulk rate drop.
The line, controlled by China Shipping (Group) Co., rose 1 percent to HK$11.98 in Hong Kong trading today before the earnings announcement. It has risen 56 percent this year in line with the benchmark Hang Seng Index’s 54 percent increase.
To contact the reporters on this story: Wendy Leung in Hong Kong at firstname.lastname@example.org
Last Updated: Ocober 22, 2009 10:08 EDT
By Wendy Leung