SINGAPORE (Apr 26): Hutchison Port Holdings Trust (HPHT) reported 1Q earnings of HK$96.9 million ($16.8 million), 33.4% lower than a year ago.
HPHT’s management says outbound cargoes to the US in 1Q19 were weak, largely resulting from the front-loading of cargoes in 4Q18 in anticipation of the tariff increase by the US on Chinese exports originally scheduled to start on Jan 1.
Revenue and other income for the quarter was HK$2.68 billion, 0.3% above last year. Combined container throughput of Hongkong International Terminals (HIT), COSCO-HIT and ACT (Asia Container Terminals) -- collectively known as HPHT Kwai Tsing -- was 9.6% below last year, mainly due to the decrease in transshipment cargoes.
The container throughput of Yantian International Container Terminals (YICT) increased 4.6% compared to the same quarter in 2018, primarily driven by the growth in the empty and transshipment cargoes.
Average revenue per TEU for Hong Kong was above last year, mainly attributed to the increased barge-to-vessel transshipment mix, decreased empty mix and the writeback of agency fee provision following the finalisation of tariff negotiation. For China, it was below last year largely due to RMB depreciation.
Cost of services rendered was HK$948.2 million, HK$44.0 million or 4.4% below last year.
Other operating expenses were HK$123.3 million, HK$2.4 million or 1.9% below last year. As a result, the operating profit was HK$769.2 million, HK$6.3 million or 0.8% above last year.
In its outlook, management says the volume of outbound cargoes to the US is expected to be volatile in 2019 as the US/China trade dispute continues.
This is because global trade is still susceptible to the macro-economic and political uncertainties including the slowing Chinese and EU economies and the yet-to-be-resolved Brexit from the EU.
Management says it will continue to focus on cost discipline and efficiency improvements to better serve its customers.
“It is expected that the effects from the consolidation through mergers and acquisitions and global alliance restructuring in the shipping industry will start to stabilise. Further deployment of mega vessels will continue necessitating investment in port equipment and continuous processes improvements by deep water port operators,” it adds.
As HPH Trust will make distribution to unitholders on a semi-annual basis, no distribution has been declared for 1Q.
Units in HPH Trust last traded at 24 US cents.
