CSCL ANNOUNCED THE 2007 INTERIM RESULTS VOLUME INCREASED STEADILY DOMESTIC LANES SOARED

China Shipping Container Lines Co., Ltd. announced its interim results for the six months ended 30 June 2008. The Chairman of CSCL, Mr. Li Shaode, the managing director, Mr. Huang Xiaowen and other management attended the press releasing and the results presentation held in the Shangri-La Hotel.
At the success of fine management and marketing efforts, CSCL recorded turnover at RMB18.231 billion for the six months ended 30 June 2008, up 4.8% as compared with the same period in 2007. Loaded container volume reached 3.570 million TEUs, 7.3% higher than that in the last corresponding period. Profit attributable to equity holders of the Company amounted to RMB637 million. Basic earnings per share were RMB0.05. The Board did not recommend payment of interim dividend for the six months ended 30 June 2008.
Having triumphed over the negative impacts from the shipping industry downturn and the macroeconomic environment, CSCL managed to achieve steady business development with our Asia Pacific and China Domestic routes, thus reporting satisfactory overall results in the first half of 2008. On top of that, through exercising stringent cost control measures, we managed to minimize impact of surging operating and fuel costs on our operations.
Under the influence of the US subprime mortgage crisis and the slowdown in demand for Europe and US routes, growth in PRC s export volume to both Europe and the US subsided, leading to a fall in loaded container volume and revenue for the container transportation industry. Yet with its flexible capacity and resource allocation aimed at better trade lane efficiency, CSCL managed to report good revenue growth in both Asia Pacific and domestic routes. Loaded container volume and revenue of the Asia Pacific routes increased year-on-year by 32.8% and 18.2% respectively. Those of the domestic routes also went up 13.4% and 45.4%, with average revenue per TEU up 28% to RMB 2,179, bringing in major revenue contribution to the Company. As for the Asia/Europe routes, despite of the slight drop in loaded container volume against the same period last year, with the help of the substantial freight increase compared with the same period last year, their revenues in all were up 10.8% against the previous corresponding period.
The Company s operating costs increased as a result of deployment of new shipping capacity and surging fuel costs. By adopting various cost control measures, which effectively control container management costs, transshipment costs, and port charges etc., container management cost per TEU basis dropped from USD67.8/TEU in the same period last year to USD65.9/TEU this year. The Group also implemented a series of measures to control its oil consumption. Oil consumption rate was down by 108,000 tons, whereas oil consumption of average revenue per TEU dropped by 15% when compared with the previous corresponding period. Besides, the Group saved USD9.48 million of fuel expenditure by bulk purchase of fuels at low prices, minimizing cost pressure from soaring fuel cost.
With its reputable China Shipping brand name and leading fleet capacity, CSCL is fully prepared for the upturn of the shipping cycle, and expanded and optimized its fleet in the first half of the year. In the six months ended 30 June 2008, the Company added shipping capacity in equivalent to 5,991 TEUs increasing the total to 452,000 TEUs, of which 82.8% were large container vessels of capacity over 4,000 TEUs. In addition to an order with Samsung Heavy Industries Company Limited for eight large container vessels of total capacity of 13,300 TEUs, the Company acquired and ordered 13 vessels from China Shipping Development and China State Shipbuilding Corporation in the first half year to boost the size of its fleet. The vessels will be delivered between 2010 and 2012 and are expected to markedly strengthen the Company s overall shipping capacity and competitiveness.
Looking ahead, the Company will ensure continuous operation of premium trade routes and services. It will optimize its route network, strictly control multi-transshipment, and improve shipment punctuality and utilization of vessel spaces to enhance service quality and boost customer satisfaction. The Company will also actively adjust the shipping capacity allocation by devoting more shipping capacity to routes with good performance and make timely adjustment based on changes in demand for domestic and international routes. The Company will expand the areas of cooperation among routes and enlarge their coverage. It will continue to tighten sea-rail intermodal and extend its coverage, and strive to penetrate regions along the Yangtze River as its future development focus.
At the same time the Company will continue to strengthen its fleet and shipping capacity, to prepare for the industry traditional peak season in the second half of the year and also the future cyclical upturn. The Company will pursue acquisition of related assets, with the aims of optimizing the container logistic operation chain and its competitiveness and profitability, as well as lower overall operating costs and diversify operating risks. In May, the Company acquired 25% equity interest in Shanghai China Shipping International Container Storage and Transportation Co., Ltd. ( ) and 60% equity interest in China Shipping (Yangpu) Cold Storage and Transportation Co., Ltd. ( ), while in August 2008, it signed an agreement to acquire China Shipping Terminal Development Co., Ltd. ( ), representing the major steps forward in expansion of the Company s container business. We believe with our container liner and port businesses growing simultaneously, our leadership position as a world class container transportation company will be strengthened, and hence encouraging stable and healthy development of the Company.