HPH Trust's Q2 performance hit by global trade tensions
Net profit attributable to unitholders was HK$136.5m, down from HK$170m a year ago
Singapore
HUTCHISON Port Holdings Trust (HPH Trust), a container port trust affiliated with Hutchison Ports, on Wednesday reported a weaker showing for its fiscal second quarter, no thanks to the ongoing challenges in the global trade environment.
HPH Trust reported a 1.4 per cent drop in its revenue and other income for the three months ended June 30 to HK$2.7 billion (S$471 million) from HK$2.8 billion the year before.
Net profit attributable to HPH Trust unitholders was HK$136.5 million, down from HK$170 million a year ago. Earnings per unit attributable to unitholders was 1.57 HK cents, down from 1.95 HK cents in the year-ago period.
The management of HPH Trust said in its results announcement that the global external environment continues to be challenging, with trade tensions between the United States and China having heightened in recent months, with new tit-for-tat tariffs imposed in the second quarter of 2019."Trade protectionism, macroeconomic and political uncertainties, including the slowing Chinese and European Union (EU) economies and the yet-to-be-resolved Brexit from the EU, threaten the recovery of global trade," it said.
As such, it noted, outbound cargoes to the US remained weak in the second quarter of this year and are expected to be volatile in the second half of 2019.
"Given the uncertainties in the global trade outlook, HPH Trust management remains cautious about future cargo trends and will continue to adhere to cost discipline and efficiency improvements in order to face the challenges ahead."
Across the industry, it noted that the financial performance of major shipping lines was mixed in the first quarter of this year, with some still operating at a loss.
"Coupled with the uncertainties in the global trade outlook and the expected increase in fuel cost from using low-sulphur fuel with effect from Jan 1, 2020, as required by the International Maritime Organization, it is anticipated that shipping lines will continue to drive cost efficiencies and promote fleet and capacity optimisation.
The continued deployment of mega vessels will necessitate investment in port facilities and continuous process improvements by deep-water port operators," management said.
For the half-year ended June 30, HPH Trust has recommended a distribution rate of six HK cents per unit, compared to a distribution rate of 8.52 HK cents per unit the year before.
HPH Trust units last closed up US$0.005 at US$0.225.
