China’s Sinotrans reports 14 percent rise in net profit
Sinotrans Ltd. reported on Wednesday a 14 percent rise in net profit for 2004 and announced a possible purchase of a 49 percent stake in state-owned Sichuan Airlines Group.
Sinotrans said its profits for the year ending Dec. 31 rose to 802.8 million Chinese yuan (USD97.0 million; EUR74.3 million) from 705.0 million yuan (USD85.1 million; EUR65.3 million) a year ago. But the 14 percent jump compared to a 23 percent advance last year.
The decline in growth was due to slowed business in Sinotrans’ express delivery unit.
Revenue climbed from 17.4 billion yuan (USD2.1 billion; EUR1.6 billion) to 21.9 billion yuan (USD2.6 billion; EUR2.0 billion).
Sinotrans faces increased competition from foreign companies as China liberalizes its logistics market in compliance with its World Trade Organization membership requirements, Sinotrans President Zhang Jianwei said.
Foreign courier companies will no longer be required to have a local partner by the end of the year. In December, U.S.-based United Parcel Services Inc. announced it will buy out Sinotrans’ stake in their joint venture for US$100 million.
The company also has a joint venture with DHL Worldwide Express Inc. Zhang said the partnership with DHL, which is owned by German mail and package delivery group Deutsche Post AG, is expected to continue.
Meanwhile, Zhang said Sinotrans wants to buy a 49 percent interest in Sichuan Airlines through 70.4 percent-owned Sinotrans Air Transportation Development Co. to improve its express delivery and shipping services and cut costs.
