HPH Trust&rsquo s H1 earnings fall on lower cargo volume passing through Hong Kong

 

HUTCHISON Port Holdings Trust&rsquo s : NS8U 0% (HPH Trust) H1 profits declined due to lower volumes of export/import cargoes handled in Hong Kong, which further impacted Hong Kong&rsquo s attractiveness as a transhipment hub.

 

In a bourse filing on Tuesday (Jul 26), HPH Trust reported a 6.8 per cent dip in profit attributable to unitholders of the trust to HK$716.3 million (S$126.5 million) in H1 2022 ended Jun 30, from HK$768.3 million a year ago.

 

The earnings per unit attributable to unitholders also fell 6.8 per cent from HK$0.0882 to HK$0.0822 in the first of this year.

 

This is despite an 8 per cent gain in its H1 revenue of HK$6.5 billion, from about HK$6 billion in the same period last year.

 

Though no forecast statement for the financial year of 2022 has been disclosed, the trust said that a decline in the volume of export/import cargoes handled in Hong Kong had put pressure on profitability.

 

As the flexibility in service rotation reduces, shipping lines were also less inclined to turn to Hong Kong as a hub for transhipment services, the trust&rsquo s manager said in its bourse filing.

 

To make matters worse, port congestion problems globally, as well as unstable vessel schedules also led to a sustained high level of skipped port calls in Q2, although HPH Trust noted some decrease as compared with Q1 2022.

 

The average revenue per twenty-foot equivalent unit (TEU) for Hong Kong and China were above last year, which HPH Trust attributed to higher storage income.

 

Business performance for the trust &mdash which has controlling interests in container port assets Kwai Tsing, Hong Kong and Yantian Port, Shenzhen, China &mdash was also affected by significant disruptions in global marine shipping schedules as Shanghai, one of the largest ports in the world, went through a lockdown from April.

 

Cost of services rendered was reported gaining 11.7 per cent above last year from higher direct charges due to high yard density and increase in external contractors&rsquo cost, higher fuel and electricity price, renminbi appreciation and additional Covid-19 precaution costs.

 

HPH Trust&rsquo s manager further foresees a dampened demand in orders from purchasing managers in the West, arising from the high inflationary environment.

 

For the half-year ended Jun 30, HPH Trust has recommended a distribution rate of HK$0.065 per unit, the same as compared to its H1 distribution rate a year before.

 

The distribution is expected to be paid out on Sep 23 after the record date on Aug 3.