SINGAPORE (Feb 10): Hutchison Port Holdings Trust (HPH Trust) saw 4Q earnings fall 27.7% to HK$385.8 million ($70.5 million), from HK$533.3 million a year ago.
Correspondingly, earnings per unit fell to 4.43 HK cents (0.81 cents), from 6.12 HK cents.
This brought earnings for the full year to HK$1.71 billion, a 1.8% decline from HK$1.74 billion a year ago. Earnings per unit for FY16 fell to 19.67 HK cents, from 20.03 HK cents.
Revenue for the three months ended Dec 31 fell 2.5% to HK$2.96 billion, from HK$3.03 billion a year ago.
The container throughput of Hongkong International Terminals (HIT) increased by 4.1% y-o-y, primarily due to higher transshipment cargoes.
Meanwhile, container throughput of Yantian International Container Terminals fell 4.3% y-o-y, primarily due to weaker empty and transshipment cargoes. This was partially mitigated by growth in US and EU cargoes.
During the quarter, average revenue per TEU for Hong Kong was lower, due to adverse throughput mix from liners. For China, average revenue per TEU was lower, on the back of depreciation of the renminbi.
Cost of services rendered was 4.6% higher at HK$1.10 billion, due to inflation, the increase in external contractors’ costs, and higher repairs and maintenance expenses.
Staff costs fell 5.4% to HK$70.6 million.
Other operating income plunged 60.2% to HK$81.0 million. This was due to the absence of a gain of HK$155.5 million arising from the cessation of Jiuzhou’s economic benefits in the previous year.
Other operating expenses fell 18.7% to HK$164.5 million on saving in rent and rates.
Operating profit fell 18.5% to HK$973.8 million
Interest and other finance costs rose 15.0% to HK$180.3 million, primarily due to higher HIBOR/ LIBOR for the bank loans’ interest rates.
In its review, the trustee-manager of HPH Trust says outbound cargoes to the US escalated in the fourth quarter as a result of the strong rebound in economic activity in the US in 2H16 supported by robust employment data.
However, the trustee-manager adds that there remains a high level of uncertainty on the policy stance of the new US administration and its domestic and global ramifications on the US economy and trade in 2017.
Continued weak consumer sentiment and high unemployment rate is also expected to hinder the speed of economic recovery in Europe and the pickup of European trade in 2017.
In addition, transshipment volume of both HIT and YICT in 2016 was negatively impacted by structural consolidation within the container shipping industry.
However, the trustee-manager says it is confident that HPH Trust, given its strong fundamentals, is well-equipped to respond promptly and effectively to any adverse external developments and challenges amid uncertainty surrounding global trade outlook.
Units of HPH Trust closed half a US cent higher at 44 US cents on Friday.
