SINGAPORE (April 24): Hutchison Port Holdings Trust (HPHT) saw its earnings for the first quarter ended March 31 fall 69.9% to HK$166.9 million ($29.9 million) from HK$554.9 million in the previous year.

Correspondingly, its 1Q17 earnings per unit fell 70% to 1.92 HK cents (0.34 cents) from the 6.37 HK cents it posted a year ago.  

Revenue for the quarter declined 6.3% to HK$2.6 billion compared to $2.7 billion in 1Q16, primarily due to lower container throughput of Yantian International Container Terminals (YICT), which decreased 1.4% as a result of weaker empty and transhipment cargoes.

Combined container throughput of Hongkong International Terminals (HIT), COSCO-HIT and Asia Container Terminals (ACT), however, grew 3.2% from the previous year due to higher transhipment cargos.

The average revenue per TEU for Hong Kong was below that of 1Q16 mainly due to greater volume of concessions offered to certain liners, says the group.

For China, a lower than last year’s average revenue per TEU was recorded and this is predominantly attributed to RMB depreciation, it adds.

Cost of services rendered was HK$918.5 million, 11.8% below last year’s mainly due to savings in operation costs due to improved resources’ allocation efficiencies, lower repairs and maintenance expenses, and RMB depreciation.

Staff costs declined 5.9% to HK$75 million.

Depreciation and amortisation grew 1.9% as compared to the previous year to HK$735.9 million mainly due to the operational commencement of YICT Phase III Expansion South Berth and West Port Phase II in the early part of 2016.

Other operating income grew 25% to HK$2.5 million as compared to HK$2 million the year before.

In its review, the trustee-manager of HPHT notes that the trust’s performance has been impacted by the outcomes of the structural consolidation within the container shipping industry and the consequent rationalisation of services –while highlighting that its co-management arrangement signed in Dec 2016 has enabled more efficient use of the facilities and manpower resources, according to the trustee-manager.

In spite of adverse market conditions, the trustee-manager believes HPHT’s shipping lines will continue to deploy mega-vessels, reform their carrier alliances and expand the coverage of vessel-sharing schemes in 2017 to achieve economies of scale to improve efficiency, lower costs and enhance overall competitiveness.

“The roll-out of the co-management arrangement is progressing well. HPH Trust is confident to deliver the expected cost and operational synergies in 2017… Given its strong fundamentals, [we are] confident that HPHT is well-equipped to respond to external developments and challenges,” it concludes.

Units of HPHT closed 1.23% higher at 41 US cents on Monday.