HPHT reports 1Q19 net profit dropped 33 percent amid higher taxes and year-ago gain

Port facilities in Hong KongPort facilities in Hong Kong

Hutchison Port Holdings Trust, or HPHT, reported Friday its first quarter profit attributable to unitholders dropped 33.4 percent on-year to HK$96.9 million (S$16.81 million) amid higher taxes, higher finance costs and a year-earlier gain.

Revenue for the quarter ended 31 March edged up 0.3 percent on-year to HK$2.68 billion, HPHT said in a filing to SGX.

The combined container throughput of HPHT Kwai Tsing fell 9.6 percent on-year, mainly on a decline in transshipment cargoes, while at Yantian International Container Terminals (YICT), located in Shenzhen, container throughput increased by 4.6 percent, HPHT said.

“Average revenue per TEU for Hong Kong was above last year, mainly attributed to the increased barge-to-vessel transshipment mix, decreased empty mix and the write-back of agency fee provision following the finalization of tariff negotiation. For China, it was below last year largely due to renminbi depreciation,” the trust said.

TEU stands for twenty-foot equivalent unit and it is used to measure a ship’s capacity to carry cargo.

Other operating income dropped 85.8 percent on-year to HK$9.5 million for the quarter due to the deferral of 2017 dividend income form River Ports Economic Benefits to the first quarter of 2018, the filing said.

Interest and other finance costs increased 19.8 percent on-year in the quarter to HK$274.4 million, HPHT said.

Taxes increased 22.8 percent on-year to HK$107.1 million, mainly on increased tax rates after the expiration of tax programs at YICT, the filing said.

HPHT issued a cautious outlook.

“The volume of outbound cargoes to the U.S. is expected to be volatile in 2019 as the U.S./China trade dispute continues,” HPHT said.

“Although the threatened tariff increase has been postponed and both the U.S. and China are in negotiation to resolve their trade dispute, management remains cautious on the expected cargo volume for 2019 as the global trade is still susceptible to the macro-economic and political uncertainties,” the trust said. “These include the slowing Chinese and EU economies and the yet-to-be-resolved Brexit from the EU. Management will continue to focus on cost discipline and efficiency improvements to better serve its customers.”

 

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