HPH Trust's quarterly earnings fall 70%

HPH trust expects to see neutral to modest growth in throughput at its Hong Kong (above) and South China container terminals as the impact of consolidation in the global shipping industry continues to play out.
HPH trust expects to see neutral to modest growth in throughput at its Hong Kong (above) and South China container terminals as the impact of consolidation in the global shipping industry continues to play out.PHOTO: HPH TRUST

Hutchison Port Trust Holdings (HPH Trust) saw first-quarter earnings drop by a steep 69.9 per cent in the absence of a one-off government rebate it received in the same period a year earlier.

Net profit for the three months to March 31 came in at HK$166.9 million (S$30 million), well down from the HK$554.9 million in the same period a year earlier.

Excluding a one-off rent and rates refund, however, net profit would be just 15.7 per cent lower than last year, the manager of the container port business trust said in a statement yesterday.

Revenue shrank 6.3 per cent to HK$2.58 billion. The combined container throughput of the terminals in Hong Kong rose 3.2 per cent thanks to higher trans-shipment cargoes, while throughput of the Yantian International Container Terminals in China fell 1.4 per cent.

It noted that the lower average revenue per twenty-foot equivalent unit (TEU) for Hong Kong was due to a greater volume of concessions offered to certain liners, while for China, it was largely because of depreciation in the Chinese yuan.

Total operating expenses increased 16.9 per cent to HK$1.87 billion, while operating profit slid 38.5 per cent to HK$709 million.

  • AT A GLANCE

    NET PROFIT: HK$166.9 million (-69.9%)

    REVENUE: HK$2.58 billion (-6.3%)

Earnings per unit came in at 1.92 HK cents, much lower than the 6.37 HK cents previously, while net asset value per unit stood at HK$4.59 as at March 31, down slightly from HK$4.74 as at Dec 31 last year.

The trust manager's chief executive Gerry Yim told a briefing before its annual general meeting yesterday that it expects to see neutral to modest growth in throughput at its Hong Kong and South China container terminals as the impact of consolidation in the global shipping industry continues to play out. Still, he noted that HPH Trust is well-positioned to serve shipping lines, which are increasingly deploying bigger vessels given its natural deep-water channels and unparallelled mega-vessel handling capabilities.

When asked about the possibility of the trust being taken private, Mr Yim said: "At this point in time, I can say that the port is not considering any privatisation nor share buybacks. We're very much focusing on the operations side, to control the cost and to expand the business."

A DBS report last December, for example, noted that a takeout offer could be on the cards if prices of HPH units persist at low levels. It noted the trust is "attractive as an acquisition target given its strategic assets", and that its major shareholder CK Hutchison is no stranger to privatisation.

HPH Trust units closed half a US cent or 1.2 per cent up at 41 US cents yesterday, before the results were announced.

Jacqueline Woo

A version of this article appeared in the print edition of The Straits Times on April 25, 2017, with the headline 'HPH Trust's quarterly earnings fall 70%'. Print Edition | Subscribe