China Zhenhua says earns 517 mln yuan via FX hedges

SHANGHAI Nov 3 (Reuters) - Shanghai Zhenhua Port Machinery (600320.SS), the world's biggest port equipment maker, said it will book a 517 million yuan ($75.6 million) profit for next year on foreign exchange hedging it has conducted.

The gain is in contrast to large currency hedging losses announced recently by several other Chinese firms.

China Railway Group (0390.HK) (601390.SS) and China Railway Construction Corp (601186.SS) (1186.HK), the country's two biggest railway contractors, last month disclosed a combined $325 million in foreign exchange losses due to hedges.

Steel-to-property conglomerate CITIC Pacific (0267.HK) has disclosed potential losses of $2 billion from unauthorised currency trading.

Analysts have said those losses could be a harbinger of more to come as many Chinese companies misjudged the trend of the U.S. dollar, which suddenly reversed course in mid-July and has since jumped nearly 20 percent against major global currencies .DXY.

"The foreign exchange market has been volatile recently, with the euro EUR= plunging and the U.S. dollar surging," Zhenhua (900947.SS) said in a filing to the Shanghai Stock Exchange.

"Our company has grasped the opportunity, adjusted our foreign currency holdings and won $149 million in foreign exchange premiums to be delivered in cash next March and April," it said.

Excluding costs derived from price differentials in the forwards, the company would earn 517 million yuan in income, which could be included in its profits next year, it said.

For next year, Zhenhua Port has hedged $2 billion in expected dollar income at an exchange rate of 6.96 yuan per dollar, it said. The yuan/dollar rate CNY=CFXS is now around 6.84.

It also hedged an expected 600 million euros of income at 9.95 yuan per euro, it said. The euro is trading around 8.7 yuan per euro at present.

Zhenhua, which accounts for 78 percent of the world's quayside crane market, generates 75 percent of its revenue from overseas markets, mostly denominated in dollars and euros, while 70 percent of its costs are in yuan.

It said its contracts signed for next year would amount to around $5 billion and the company had not hedged the remaining foreign currency against the yuan as it would use it for spare part imports and foreign currency spending outside China.

The company's Shanghai-listed shares were up 0.75 percent at 6.75 yuan on Monday, in line with a 0.80 percent rise in the benchmark Shanghai Composite Index .SSEC. ($1=6.84 Yuan) (Reporting by Lu Jianxin; Editing by Edmund Klamann)