Hutchison Port Trust's Q2 profit falls 37% on lower container throughput

HUTCHISON Port Holdings Trust (HPH Trust) had its bottom line in the fiscal second quarter dented by 36.8 per cent on lower container throughput at its Hong Kong and Shenzhen ports.

Profit attributable to HPH Trust's unitholders in Q2 came in at HK$170 million (S$29.49 million) from HK$269.1 million in the corresponding year-ago period, while it clocked a 3.6 per cent decline in revenue to HK$2.79 billion.

Combined container throughput of its Kwai Tsing terminals in Hong Kong fell by 7.2 per cent compared to the same quarter in 2017, primarily due to the decline in transshipment cargoes.

In addition, the container throughput of its terminals in Yantian, Shenzhen slipped by 4.1 per cent compared to the same quarter in 2017, primarily due to the drop in empty cargoes but partially offset by an increase in the US and transshipment cargoes, HPH Trust said.

The average revenue per twenty-foot equivalent unit (TEU) for Hong Kong was up from the previous year, mostly attributed to a write-back of agency fee provisions following the finalisation of tariff negotiations.

In China, the average revenue per TEU also came in higher than last year, which HPH Trust attributed to the yuan's appreciation, but which was partially offset by certain revisions to tariffs following the mergers and acquisitions of some shipping lines in the second half of 2017 and increased transshipment mix.

HPH Trust is making a distribution of 8.52 Hong Kong cents per unit for the three months ended June 30, which is down from the 9.50 Hong Kong cents made in the same period a year ago.

The trust has set the books closure date for July 31, while it has set Sep 20 as the date for its payment of distribution.

In its earnings presentation, HPH Trust noted that prospects for global trade in 2018 face an "almost unprecedented level of uncertainty" due to trade tensions and disputes between the United States and both China and the European Union.

"The impact of measures which may arise out of the trade disputes, especially those between the United States and China, on the performance of HPH Trust for the remainder of the year cannot readily be quantified given the level of uncertainty that currently prevails as to both the specific nature, extent and timing of such measures and the consequent precise impact they may have on local and global trade flows and, as such, HPH Trust's business," it said.

An industry trend to keep an eye on will be increasing emphasis on security in the wake of cyberattacks and general threats of cyberattacks on companies, HPH Trust highlighted.

Trustee-manager Hutchison Port Holdings Management "remains both vigilant and cautious about expected cargo volume for 2018, particularly in light of the trade and geopolitical tensions referred to above and will continue to adhere to strict financial discipline", HPH Trust concluded.

HPH Trust's units closed down 2.6 per cent, or one Singapore cent, to 37.5 Singapore cents on Monday.