China Merchants Holdings looks over horizon to port in Togo

China Merchants Holdings (International), a major port operator on the mainland, is on course to expand its portfolio into emerging markets by buying a half-stake in a container terminal in West Africa for €150 million (HK$1.46 billion).

The announcement of the deal came yesterday as the company revealed that its net profit stumbled 55 per cent year on year to HK$1.76 billion, or 70.97 HK cents per share, in the first half. The results were dragged down by a big profit drop from its container manufacturing unit, China International Marine Containers, and a higher base last year caused by a HK$1.36 billion disposal gain. The board declared a 22 HK cents per share dividend.

"There will be uncertainties in the world economy for the next six months, weighing on the mainland port operators towards the year end," China Merchants chairman Fu Yuning said.

Fu said it would be difficult for mainland ports to achieve the 10 per cent annual growth target set earlier this year.

Port figures were discouraging in July and August, Fu said. China Merchants' ports handled just 2 per cent more containers in July, down from 5.6 per cent growth in the first half. But after factoring in Christmas orders in September and October, the company was still aiming for 5 per cent growth for the full year.

Earnings before interest and tax at the company's port operations amounted to HK$3 billion. This was on par with a year earlier but reflected the slowest growth in throughput volume since 2008. Overall throughput grew 5.6 per cent year on year to 29.18 million 20-ft equivalent units (teus) in the first six months.