HPH Trust reports 3% fall in 3Q earnings to $40.4 mil on higher taxes

SINGAPORE (Oct 25): Hutchison Port Holdings Trust (HPHT) reported earnings per unit (EPU) of 2.67 HK cents (0.46 cents) for the 3Q19 ended Sept, nearly 3% lower compared to the earnings per unit of 2.75 HK cents for 3Q18.

The weaker bottomline was the result of a 2.9% fall in earnings to HK$232.5 million ($40.4 million) for the 3Q19 ended Sept, from earnings of HK$239.5 million in 3Q18.

HPH Trust’s trustee-manager says outbound cargoes to the US remained weak and slipped in 3Q19 amid the trade dispute between the US and China.

Revenue and other income had come in flat at HK$3.03 billion compared to a year ago. Combined container throughput in 3Q19 of HPHT Kwai Tsing – consisting Hongkong International Terminals (HIT), COSCO-HIT and ACT (Asia Container Terminals) -- was comparable to 3Q18.

The container throughput of Yantian International Container Terminals (YICT) was 0.9% lower in 3Q19 compared to 3Q18 due to a drop in US cargoes, although this was partially offset by more empty cargoes.

The average revenue per TEU for Hong Kong was also down, mainly due to higher transshipment mix. For China, the average revenue per TEU was above last year largely due to favourable shipping line mix.

Total operating expenses dipped 0.9% to HK$1.96 billion. As a result, total operating profit was HK$1.07 billion, 1.9% above last year.

However, taxation came in 21% higher at HK$154.8 million, mainly due to higher profit and higher 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 year end of 2018.

For the 9M19 ended Sept, distribution per unit (DPU) came in at 6.00 HK cents, down 29.6% compared to distribution per unit of 8.52 HK cents a year ago.

There is no distribution in 3Q19 as the trust makes distributions on a semi-annual basis.

In its outlook statement, HPH Trust’s manager says global trade is expected to remain sluggish due to intensifying trade tensions and slowing manufacturing and business activities.

There is also the increase in operational costs due to the new low-sulphur fuel regulation with effect from Jan 1, 2020.

Year to date, units in HPH Trust are down 33% to close at 16 US cents (21.8 cents) on Friday.