CHINA Shipping Container Lines Co, the nation's second-largest carrier of sea cargo boxes, said first-half profit fell 96 percent after fuel costs increased.

Net income dropped to 81.2 million yuan (US$10.2 million), or 0.01 yuan a share, from 2.14 billion yuan, or 0.36 yuan, a year earlier, the Shanghai-based company said in a statement to the Hong Kong Stock Exchange on Aug 28. Sales rose 3.7 percent to 14 billion yuan.

Nippon Yusen K.K., China Shipping and other container shipping lines in Asia have reported lower profits as they pay more for fuel. Freight rates are also falling as the global fleet expands at a faster rate than demand, putting pressure on margins.

Bunker fuel prices are rising and China Shipping can't pass on all of the additional costs. The company's ability to cope with a down cycle is yet to be tested. China Shipping was listed in 2004.

The company's stock fell 2 percent to HK$1.97 (25 US cents) in Hong Kong before the earnings statement, bringing its decline this year to 27 percent. The benchmark Hang Seng Index has gained 14 percent.

The price of Centistoke 380 bunker fuel, used by ships, traded at an average US$332 per metric ton in Singapore in the first half, 42 percent higher than a year earlier.

Source:佚名