HPH Trust posts 12.9% drop in Q1 net profit to HK$145.4m

HUTCHISON Port Holdings (HPH) Trust on Friday posted a 12.9 per cent drop in net profit to HK$145.4 million (S$24.3 million) for its first quarter ended March 31, 2018, while revenue rose 3.5 per cent to HK$2.7 billion.

Earnings per unit attributable to unitholders fell in tandem to 1.67 HK cents, versus 1.92 HK cents a year ago.

The terminal operator said that combined container throughput of its Kwai Tsing port was 1 per cent above last year, thanks to higher transshipment cargoes. The container throughput of Yantian International Container Terminals (YICT) rose 8.7 per cent as compared to the same quarter in 2017, primarily driven by the growth in empty and transshipment cargoes.

Average revenue per 20-ft equivalent unit (TEU) for Hong Kong and China was below last year, mainly due to revisions to tariffs following the merger and acquisition of some liners in the second half of 2017. In addition, China's average revenue per TEU was also "adversely impacted" by "unfavourable transshipment mix", but partially offset by +RMB appreciation.

"Outbound cargoes to the US continued to grow in the first quarter of 2018 by 2 per cent and outbound cargoes to the European Union was comparable to last year," it said.

Giving an outlook, the port company added: "2018 is set to be a transformative year for the global shipping lines industry, driven by shifting economic trends and trade flows in conjunction with the consolidation of ownership. Investment in the modernisation and expansion of port facilities is expected to continue to drive overall efficiencies and competitiveness.

"Overall, 2018 global trade outlook remains positive, with solid trade volume growth recorded in the first quarter of 2018 although this, by and large, is still susceptible to the uncertainties and downside risks arising from protectionist US trade policies and geopolitical tensions."

HPH expects shipping lines to continue to deploy mega-vessels to attain capacity and fleet optimisation to drive further cost efficiencies. In addition, it noted that focus has shifted from port performance to supply chain performance to enhance competitiveness and operational efficiencies. Greater emphasis will also be placed on security in the wake of growing cyberattack threats on companies.

Its units closed half a cent or 1.5 per cent lower at US$0.33 on the stock market on Friday.