Thursday, 02 July 2020 | 17:27
SPONSORS
View by:

Hutchison Port Holdings Trust Wary of Coronavirus

Wednesday, 12 February 2020 | 00:00

Revenue and other income for the quarter was HK$2,668.1 million, HK$331.3 million or 11.0% below last year. Combined container throughput of HIT(a), COSCO-HIT(b) and ACT(c) (collectively “HPHT Kwai Tsing”) decreased by 9.3% as compared to the same quarter in 2018, primarily due to the decrease in transshipment cargoes. The container throughput of YICT(d) was 9.2% below last year, primarily driven by the decrease in US and empty cargoes, as a result of the frontloading of US cargoes in the fourth quarter of 2018.
Average revenue per TEU for Hong Kong was below last year, mainly attributed to the increased transshipment mix and agency fee provision adjustment following the latest tariff negotiation. For China, the average revenue per TEU was above last year, primarily attributed to favourable shipping line mix.

Cost of services rendered was HK$959.3 million, HK$168.7 million or 15.0% below last year. The decrease was attributed to lower throughput, lower repair and maintenance, savings arising from Hong Kong Seaport Joint Operating Alliance (“SPA”) arrangement and cost control initiatives and RMB depreciation, but were partially offset by general cost inflations, including the increase in external contractors' costs and higher fuel price. Staff costs were HK$70.7 million, HK$5.5 million or 8.4% above last year. The increase was mainly due to general cost inflations and reversal of over-provided cost in the fourth quarter of 2018. Depreciation and amortisation was HK$767.2 million, comparable to last year. Other operating income was HK$17.4 million, HK$9.8 million or 128.9% above last year. The increase was due to the higher government subsidies by YICT.

Other operating expenses were HK$137.6 million, HK$7.8 million or 5.4% below last year. The decrease was primarily due to the savings in rent and rates.

As a result, total operating profit was HK$750.7 million, HK$149.2 million or 16.6% below last year.

Interest and other finance costs were HK$266.3 million, HK$4.1 million or 1.5% below last year, primarily due to lower interest cost after bank loan repayment and lower LIBOR applied on the bank loans' interest rates.
Share of profits less losses after tax of associated companies was a loss of HK$22.6 million, HK$6.4 million or 22.1% better than last year, mainly due to better performance of HICT.

Share of profits less losses after tax of joint ventures was HK$8.3 million, HK$17.1 million or 67.3% lower than last year, mainly due to weaker combined results of COSCO-HIT and ACT resulting from 9% lower throughput handled.

Taxation was HK$109.1 million, HK$8.4 million or 7.1% lower than last year, mainly due to lower profit, but partially offset by the increase of tax rates upon the expiries of “High and New Technology Enterprise” status of YICT Phase I & II and the tax exemption period for YICT's West Port Phase II berth #4 at the end of 2018.

Overall profit for the quarter was HK$361.0 million, HK$12,141.6 million or 103.1% above last year. Profit attributable to unitholders of HPH Trust was HK$62.3 million, HK$12,168.5 million or 100.5% above last year. Excluding the impairment impact in 2018, profit for the quarter was HK$147.4 million or 29.0% below last year. Profit attributable to unitholders of HPH Trust was HK$120.5 million or 65.9% below last year.

Consolidated income statement (01/01/2019-31/12/2019 vs 01/01/2018-31/12/2018)
Revenue and other income for the year was HK$11,120.9 million, HK$361.7 million or 3.1% below last year. Combined container throughput of HPHT Kwai Tsing decreased by 5.9% as compared to last year, primarily due to decrease in intra-Asia and transshipment cargoes. Container throughput of YICT decreased by 0.7% as compared to 2018, primarily driven by the decrease in US cargoes, but partially offset by the growth in the empty and transshipment cargoes. Average revenue per TEU for Hong Kong was below last year, mainly attributed to the increased transshipment mix. Average revenue per TEU for China was comparable to last year.
Cost of services rendered was HK$3,881.6 million, HK$261.9 million or 6.3% below last year. This was attributed to lower throughput, lower repair and maintenance, savings arising from SPA arrangement and cost control initiatives and RMB depreciation, but partially offset by the general cost inflations, including the increase in external contractors' costs and higher fuel price. Staff costs were HK$288.0 million, HK$1.5 million or 0.5% above last year. Depreciation and amortisation was HK$3,079.7 million, comparable to last year. Other operating income was HK$96.4 million, HK$32.7 million or 25.3% below last year. The decrease was largely due to the deferral of 2017 dividend income from River Ports Economic Benefits to the first quarter of 2018, YICT's receipt of an award in 2018 and exchange gain in 2018 mainly arising on revaluation of YICT's net-RMB denominated monetary assets, but partially offset by higher government subsidies received by YICT in 2019.

Other operating expenses were HK$537.1 million, HK$16.8 million or 3.0% below last year, primarily due to savings in rent and rates.

As a result, total operating profit was HK$3,430.9 million, HK$120.9 million or 3.4% below last year.

Interest and other finance costs were HK$1,075.2 million, HK$53.4 million or 5.2% above last year, primarily due to higher HIBOR/LIBOR applied on the bank loans' interest rates.

Share of profits less losses after tax of associated companies was a loss of HK$92.3 million, HK$14.6 million or 13.7% better than last year mainly due to better performance of HICT.

Share of profits less losses after tax of joint ventures was HK38.3 million, HK$16.0 million or 29.5% below last year, mainly due to lower dividend income of a joint venture and the recognition of asset disposal loss at COSCO-HIT.

Taxation was HK$480.0 million, HK$45.6 million or 10.5% higher than last year, primarily due to the increase of tax rates upon the expiries of “High and New Technology Enterprise” status of YICT Phase I & II and the tax exemption period for YICT's West Port Phase II berth #4, but partially offset by lower profit.

Overall profit was HK$1,821.7 million, HK$12,067.7 million or 117.8% above last year. Profit attributable to unitholders of HPH Trust was HK$528.2 million, HK$12,079.5 million or 104.6% above last year. Excluding the impairment impact in 2018, profit was HK$221.3 million or 10.8% below last year. Profit attributable to unitholders of HPH Trust was HK$209.5 million or 28.4% below last year.

Material changes in statement of financial position and consolidated statement of cash flows Please refer to footnotes of 1(b)(i) and 1(c).

10. Where a forecast, or a prospect statement, has been previously disclosed to unitholders, any variance between it and the actual results.
No forecast statement for the financial year 2019 has been disclosed.

11. Commentary on the significant trends of the competitive conditions of the industry in which the Group operates and any known factors or events that may affect the Group in the next reporting quarter and the next 12 months.

Uncertainties subdued the global economy and trade in 2019 and these are expected to persist in 2020 in view of the geopolitical tensions in the Middle East, the yet-to-be-resolved Brexit, US presidential election, the rising trade protectionism and coronavirus outbreak in China.

Outbound cargoes to the US stayed weak and tumbled considerably year-on-year in the fourth quarter of 2019. This was attributed to the volatility of cargoes caused by the trade dispute between the US and China where cargoes were frontloaded in the fourth quarter of 2018, resulting in a high base volume in 2018. Although the US and China have reached agreement on “phase one” trade deal, some of the thorniest issues remain unresolved. It is not expected the trade dispute can be easily and fully settled shortly. The recent coronavirus outbreak in China is halting its business activities and disrupting the supply chain and this may further put pressure on the global trade. Against this backdrop of political and market volatility, HPH Trust management remains cautious about future cargo trends and will continue to exercise cost discipline while pursuing efficiency improvements.

The global trade uncertainties, exacerbated by the rising cost related to the compliance with new low-sulphur fuel regulation with effect from 1 January 2020, create an unfavourable operating environment for shipping lines. While further consolidation of ownership within shipping industry may be limited, increasing coordination among alliance members to optimise fleet and capacity, and on-going deployment of mega vessels to drive cost efficiencies is expected. HPH Trust is committed to serving its customers, supporting and complementing this industry shift through its unparalleled mega-vessel handling capabilities and continuous investment in port facilities and process improvements.
Source: Hutchison Port Holdings Trust

Comments
    There are no comments available.
    Name:  
    Email:  
    Comment:  
     
    In order to send the form you have to type the displayed code.

     
SPONSORS

NEWSLETTER