Hutchison Port Holdings Trust (HPHT) has reported earnings of HK$1.10 billion ($185.7 million) for the FY2022 ended Dec 31, 2022, down 37.1% y-o-y.

Earnings per unit similarly fell by 37.1% y-o-y to 12.62 HK cents.

In its earnings statement, the group said it experienced “challenging business conditions” in the 2HFY2022.

“There was a commencement of a significant decline in containers shipped from China to Europe and North America and a decline in China imports. The closed loop Covid-19 control arrangements at Yantian continued to pressure operating costs and cross border restrictions on trucking operations had an adverse effect on shipments through Hong Kong,” reads the statement.

“Shipping lines have been adjusting services to reflect the changed conditions which have resulted in a reduction in service flexibility for the HPHT ports,” it adds.

Revenue and other income for the FY2022 fell by 8.1% y-o-y to HK$12.17 billion as combined container throughput of HIT, COSCO-HIT and ACT (collectively known as HPHT Kwai Tsing), fell by 11.4% y-o-y mainly due to lower local and transshipment cargoes.

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HIT refers to Terminals 4, 6, 7 and the two berths in Terminal 9 at Kwai Tsing, Hong Kong. COSCO-HIT refers to Terminal 8 East, also at Kwai Tsing. ACT refers to Terminal 8 West at Kwai Tsing.

The lower revenue was also attributable to the lower container throughput of YICT, which fell by 4.2% y-o-y. The decrease is primarily driven by the decrease in the US, EU and transshipment cargoes, but partially offset by higher empties. YICT refers to Yantian International Container Terminals, located at Yantian, Shenzhen in China.

The average revenue per twenty-foot equivalent unit (TEU) in Hong Kong was higher y-o-y mainly due to higher storage income. However, this was offset by the lower average revenue per TEU in China. The lower revenue was attributed to lower storage income and depreciation of the renminbi (RMB).

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Other operating income plunged by 65.0% y-o-y to HK$146.2 million due to lower government subsidies in the year before.

Accordingly, operating profit fell by 20.4% y-o-y to HK$4.28 billion.

During the year, HPHT saw share of losses after tax of associated companies at HK$81.4 million, 0.1% higher y-o-y.

Share of profits less losses after tax of joint ventures fell by 35.3% y-o-y to HK$74.7 million mainly due to the worse performance in the combined results of COSCO-HIT and ACT on the back of lower throughput and higher interest expenses.

Profit before tax fell by 24.9% y-o-y to HK$3.60 billion.

During the FY2022, HPHT’s distribution per unit (DPU) stood unchanged at 14.50 HK cents for the full year.

Its net asset value (NAV) attributable to unitholders stood at HK$3.08 as at Dec 31, 2022, down 0.96% y-o-y.

For more stories about where money flows, <a class='gtm_see_also_3_inread' style='text-decoration: underline;' href='/section/capital?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>click here for Capital Section</a>

As at Dec 31, 2022, cash and cash equivalents stood at HK$10.40 billion.

Looking ahead, the group is more positive for the FY2023 with the year seeing some “encouraging developments” with the relaxation of Covid-19 controls in China and the reopening of borders with Hong Kong.

“Apart from expected gradual improvements in international trade during the year, HPHT will benefit from the elimination of the closed loop arrangements at Yantian and an anticipated return of containers to Hong Kong as cross border trucking recovers,” says the group.

That said, the current decline in international trade and possible recessions in Europe and the US have made it difficult for the group to provide a forecast for its business for the FY2023.

“Management is focused on dealing with the short-term challenges for the business and at the same time managing initiatives for long term success including human resource development, infrastructure improvements and a 5% reduction in emissions at the ports by the end of 2026. Proof-of-concept tests for autonomous electric trucks will commence in 2023 and a program to convert RTGC or rubber tyred gantry crane to electrical power will continue,” reads the statement released by HPHT.

With interest rates expected to rise in 2023, the group says its exposure to interest rate rises has been hedged on about 71% of its long-term debt as at Dec 31, 2022.

Units in HPHT (USD) closed flat at 21 US cents. However, units in HPHT (SGD) closed 0.5 cent higher or 1.82% up at 28 cents.

Hutchison Port Holdings reports 37.1% lower earnings of HK$1.10 bil for FY2022, DPU of 14.50 HK cents

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Hutchison Port Holdings reports 37.1% lower earnings of HK$1.10 bil for FY2022, DPU of 14.50 HK cents

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