Dalian Port Announces 2012 Interim Results

Revenue surges 19.5% to RMB2.048 billion

Maintaining Good Performance in the Throughput of Major Business Segments
Strengthening Market Development
Consolidating the Strengths of the Group

HONG KONG, Aug. 31, 2012 /PRNewswire-Asia/ -- Dalian Port (PDA) Company Limited ("Dalian Port" or the "Group", H Share stock code: 2880; A Share stock code: 601880), the largest comprehensive port operator in the Northeastern China, today announced its interim results for the six months ended 30 June 2012 (the "period under review").

The first half of 2012 saw a complex and volatile international political and economic environment. Facing the increasing difficulties, Dalian Port still maintained a steady growth. For the six months ended 30 June 2012, the Group achieved approximately RMB2,048,221,533.54 in revenue, representing an increase of 19.5% over that of the previous year, gross profit was RMB818,520,976.75 which increased by 25.3% compared to the first half of 2011, gross margin reached 40.0%, a 1.9% higher than 38.1% in the first half of 2011. The Group's profit attributable to shareholders amounted to approximately RMB300,151,325.67, representing a decrease of 11.1% as compared with the same period of last year. Basic earnings per share were approximately RMB6.78 cents.

Looking into each business segment, the Group handled a total of approximately 19.267 million tonnes of oil and liquefied chemicals, an increase of 0.2% as compared with the same period of 2011, of which approximately 10.36 million tonnes was imported crude oil, an increase of 16.1% as compared with the corresponding period in 2011. In the Container Segment, the Group handled approximately 4.095 million TEUs, an increase of 18.8%, of which approximately 3.601 million TEUs were handled by the Group at Dalian port, an increase of 24.3%. In the Automobile Terminal Segment, the Group handled 107,102 vehicles, an increase of 35.1%. In the Ore Segment, the Group handled approximately 12.289 million tonnes, a decrease of 17.9%. In the General Cargo Segment, the Group handled approximately 16.318 million tonnes of cargoes, a slight decrease of 0.7%. In the Bulk Grain Segment, the Group handled approximately 3.628 million tonnes of bulk grain, an increase of 6.1%. In the Passenger and Ro-Ro Segment, the Group transported approximately 1.841 million passengers, an increase of 6.7% and approximately 449,000 vehicles, an increase of 47.7% as compared with corresponding period in 2011.

The management of Dalian Port said, "The industry encountered numerous challenges in the first half of 2012. Despite the uncertainties of the China's economy and trading environment, as the biggest comprehensive operator in Northeastern China, the Group has been actively and objectively analyzing the macro economic situation to take advantage of the market movements and minimize the negative impacts which might arise. In the meantime, the Group continued to enhance its operation and services. Therefore, the major businesses of the Group has achieved sound performance and showed strong defensiveness."

Regarding the oil segment, during the period under review, the Group had continued to enhance its efforts to retain existing hinterland refineries customers and to expand trans-shipment customer bases, which has led to a significant increase in imported crude oil in the first half of 2012. The Group has been working closely with custom and some of its customers to actively advance the process of application for recognizing our No. 8 crude oil storage tanks as the public bonded storage tanks. In addition, the Group has completed the application for resuming operations of Nanhai phase-I crude oil tanks. The Group actively coordinated with customers to speed up transshipment of crude oil, improved the utilization of storage tanks and increased the volume of trans-shipment. Moreover, the Group has completed the acquisition of 45% equities in Changxing Island investment Development Co., Ltd., and effectively promoted the construction and development of the projects of Group's oil/liquefied chemicals terminals and storage tanks in the area of Changxing Island.

In the container segment, in addition to the existing principal shipping lines, the Group has procured the introduction of three new Near-Sea shipping lines and four new direct lines for domestic trade. The Group made great efforts to develop the business of empty container trans-shipment and restowage due to vessel-changing. In May 2012, the Group successfully procured the stowage business of COSCO. The Group also cooperated with shipping companies such as Maersk Line and New Haifeng with regard to empty container trans-shipment business, aiming to establish Dalian trans-shipment base for empty container. Meanwhile, leveraging on its self-owned vessels, the Group actively developed trans-shipment business within Bohai rim feeder and maintained trans-shipment business for Jinzhou port. The Group has also fully undertaken domestic trade business for Dandong, and the frequency of voyage schedule on feeder for Dandong has doubled due to the launching of such project. Additionally, Beiliang Trans-shipment project was also launched.

In terms of logistics service on land, the Group made efforts to develop the regular rail business by introducing new routes of railway transportation services and enhancing the frequency of service schedule for the purpose of increasing the cargo volume. In the first half of 2012, a total of three new regular railway transportation routes have been introduced. The Group also continued to push forward the construction of highway container transportation system, for which the Group was engaged in providing highway transportation services in Shenyang areas, especially the distribution services between inland ports and customers' works, and accepted the carriage for the cargo on return trip from Dalian to Shenyang. At the same time, by means of developing neighbouring-port industries, the Group proactively pushed forward customer-related logistics projects so as to increase the sources of containerizable cargo.

In the automobile segment, during the period under review, the Group strengthened co-operation with customers, and has procured Anji Automotive Logistics Co. Ltd. to move its entrepot storage to Dalian automobile terminal. Meanwhile, leveraging on the existing car-carrying vessel lines and jointly with the shipping companies, the Group strengthened the market development for vehicles shipment between the south and the north, and the water transportation volume of vehicle for domestic trade has significantly increased by 60%. As a result of such measures, the status of Dalian port as a hub port for car-carrying has been further consolidated. Facing the decrease of export volume by exporters mainly due to the tariff increase in Brazil and Syria's political unrest, the Group successfully attracted more than 1,500 exported vehicles to be shipped through the Group's automobile terminals, which reduced the effect of the unfavourable factors.

Regarding the Ore Segment, the Group set about building its service brand of Zero-Loss, and has established a special working group to recommend the Group's high quality services to the customers, aiming to enhance the marketing ability of the Group. The Group continued to strengthen the co-operation with well-known traders at home and abroad as well as attracted small and medium-sized traders, to build unobstructed sales channel for traded ore, aiming to jointly establish Dalian port a spot commodity exchange for iron ore. In addition, taking Dalian Port Bulk Logistics Centre as a platform, the Group has fully launched a series of value-added services such as bonded storage for iron ore and mixed ore, which laid the foundation for the Group to build the centre of ore distribution and value-added trade services within the Bohai rim.

For the General Cargo Segment, by regular customer visiting and the improvement of cargo transportation quality, the Group enhanced the solicitation of the steel transported by sea from the steel companies in the hinterland. Meanwhile, the Group adjusted the port charges for certain customers so as to improve the profitability. Facing the depressed coal market, the Group established close cooperation relationship at a deeper level with both the new and the old customers. It also took the initiative to adjust the direction of market development and attracted more imported coal to be handled by the Group's terminals. Leveraging on the technical advantages in handling large-sized equipment, the Group has set up the brand for its high-quality and high-efficiency loading and discharging services for large-sized equipment and attracted more customers to ship their cargoes via the Group's general cargo terminals.

In respect of Bulk Grain Segment, the Group has deepened collaboration with key customers and adopted the truck and vessel integration logistics model. In the beginning of this year, the Group signed the transportation agreement for the year with many key customers to lock the annual throughput to the maximum extent and to balance monthly throughput. Also, the increase in frequency of service schedule between two ports and adding a new sea shipping line between Dalian and Shenzhen have improved the grain transportation capacity. 157,000 tonnes of corn was exported from the Group's port in the first half of 2012 as the result of the Group`s great marketing efforts of paying regular visits to customers and coordinating actively with the railways for carrying capacity.

Regarding the Passenger and Ro-Ro Segment, MV.Qingshandao and MV.Changshandao built by China Shipping Passenger Liner Co., Ltd. were put into operation for the route from Dalian to Yantai and calls our port, so the Group's market influence and competitiveness have been further increased. The Group also improved customer services and launched high-end passenger services. To satisfy various needs, the green channels for VIP, the disabled, the senior citizen and the children have been established with the collaboration with China Mobile, which has improved the image of the port.

For the Value-added Services Segment, as for tugging, the port services, ocean engineering and shipbuilding industries recorded a stable performance. The Group paid great attention to communication with its customers and improvement in tugging services to achieve a stable growth in the tugging business in Dalian. By the end of June 2012, the Group had a total of 39 tugboats and four pilot boats. Among these vessels, 16 tugboats were leased out under long-term leases to other ports outside Dalian. The Group retained a leading tugging services position amongst all port operators in China. In addition, the Group actively implemented the strategic transformation, promoted the construction of the integrated platform of industry, commerce and trade, cooperated with Spot Commodity Exchange of Northeastern Asia and established a spot commodity delivery warehouse in Changxing Island port area to attract the cargoes for transshipment there. 

In the second half of 2012, facing the changes in the world economic order and the adjustment of the domestic industrial structure, the Group will continue to implement relevant reforms and innovations with the means of changing development methods as per the overall national development strategy and the global port and shipping market development trend in the second half of 2012. To improve the Group's return performance, the following six major measures have been introduced: (i) introduction of new service products and improving service quality to increase throughput; (ii) strengthening financial management to increase profit; (iii) to promote the overall reform of all business segments to improve performance; (iv) to make full efforts to promote joint venture and cooperation to gain returns from new projects; (v) to accelerate the construction of three core port areas to improve construction management; and (vi) to enhance port safety management to improve port operation safety. The Group will focus on the business transformation from four aspects, namely, construction of comprehensive logistics system, establishment of integrated platform of industry, commerce and trade, enhancing attraction in harbor industries development, and innovation of products and services. The Group is aiming to build up a new port operation mode led by Spot Commodity Exchange of Northeastern Asia with the trading companies as the platform and support of the terminal operations. The auto logistics department will be established. At the same, the cost control will be implements rigorously to promote the continuous growth of the Company's overall revenues and returns. 

About Dalian Port (PDA) Company Limited

Established in 2005, Dalian Port (PDA) Company Limited is the biggest comprehensive port operator in the Three Northeastern Provinces of China. The Group is principally engaged in the following businesses: 1) oil/liquefied chemicals terminal and related logistics services; 2) container terminal and related logistics services; 3) automobile terminal and related logistics services; 4) ore terminal and related logistics services; 5) general cargo terminal and related logistics services; 6) bulk grain terminal and related logistics services; 7) passenger and roll-on, roll-off terminal and related logistics services; and 8) port value-added services and ancillary port operations. The Company was listed on the Main Board of SEHK and Shanghai Stock Exchange in April 2006 and December 2010 respectively. The Company is the first port company listed in the stock exchanges of both Hong Kong and Shanghai.