20-04-2016

Hutchison Port Holdings Trust profit up 94pc as revenues slip 7pc

HPH

HONG KONG-owned but Singapore-listed port operator Hutchison Port Holdings Trust (HPH Trust) has posted a 94 per cent year-on-year first quarter net profit increase to HK$554.9 million (US$71.5 million), drawn on revenues of HK$27.51 billion, down seven per cent.

"Given the soft global trade outlook, management remains cautious on expected cargo volume for 2016 and will continue to focus on improvements to tariffs and costs," said the HPH statement accompanying the results. 

"HPH Trust will target improving its core debt metrics over the five-year period from 2017 to 2021. At the end of this period, HPH Trust expects consolidated debt to consolidated total capital not be greater than 30 per cent.

"Management believes that active management of debt level is the most prudent approach in protecting unitholders' long-term interests," the statement said. 

During the first quarter, Hongkong International Terminals (HIT) received a government rent and rates refund of HK$430 million, after reaching agreement on the final rateable value of certain leased properties for the past years. 

Year to date, throughput of HPH Trust's deep-water ports was eight per cent below last year. Yantian International Container Terminal's (YICT) throughput was one per cent below last year. 

Outbound cargoes to the US and EU showed an upward trend in the first quarter of 2016. YICT's throughput drop was mainly due to weaker transshipments and empty boxes but was partially offset by growth in US and Europe cargo. 

The volume of containers handled by HPH Trust is affected by the performance of the US and Europe, said the statement. 

"The US economy continues to expand albeit at a rather slow pace. We anticipate US economic outlook for 2016 will be stable," said the Hutchison statement. 

Outbound cargoes to US posted minimal growth in the first quarter of 2016 and it is expected that the full year volume will result in a slight increase.

Outbound cargoes to Europe showed improvement and displayed a slight upward trend in the first quarter of 2016. However, weak consumer sentiment and high unemployment rate remain a drag on its economic recovery. 

"We expect volume towards Europe will likely to be flat in 2016. As the gateway serving imports and exports of China, YICT's volume is largely dependent on the economic performance of the US and Europe" said the statement.

HPH Trust's performance is also dependent on the outcomes of structural changes occurring in the container shipping industry. 

HIT, as a regional transshipment hub, has been negatively affected by the rationalisation and restructuring of various global shipping alliances over the past few quarters and is expected to be under volume pressure in the near term. 

Combined throughput of HIT, COSCOHIT and Asia Container Terminal (ACT) dropped 13 per cent year on year. 

Outbound cargoes to the US and EU showed an upward trend in the first quarter of 2016. The volume of containers handled by HPH Trust is affected by the performance of the US and Europe. 

"The US economy continues to expand albeit at a slow pace. We anticipate US economic outlook for 2016 will be stable," said the Hutchison statement.

Outbound cargoes to US posted minimal growth in the first quarter of 2016 and it is expected that the full year volume will result in a slight increase.

Outbound cargoes to Europe showed improvement and displayed a slight upward trend in the first quarter of 2016. However, weak consumer sentiment and high unemployment rate remain a drag on its economic recovery. 

"We expect volume towards Europe will likely to be flat in 2016. As the gateway serving imports and exports of China, YICT's volume is largely dependent on the economic performance of the US and Europe" said the statement.

HPH Trust's performance is also dependent on the outcomes of structural changes occurring in the container shipping industry. 

HIT, as a regional transshipment hub, has been negatively affected by the rationalisation and restructuring of various global shipping alliances over the past few quarters and is expected to be under volume pressure in the near term. 

Source: Schednet

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