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HPH Trust posts loss of US$1.3m in 2018 with box volumes down 1pc

2019-02-15

SINGAPORE-LISTED Hutchison Port Holdings Trust (HPH) has registered a full year loss of HKD10.25 million (US$1.3 million) as opposed to a profit of HKD2.22 million in 2017.

Hong Kong-headquartered HPH Trust attributed the loss to a non-cash impairment amounting to HKD12.29 million. The company said the impairment was taken in view of mounting global trade uncertainties, possible behavioural changes in multinational corporations including accelerating the diversification of production bases outside of China caused by trade tensions, and effects stemming from the structural changes within the shipping line industry, the Seatrade Martime News of UK reported.

Revenue for the year ending December 31, 2018 slipped 0.6 per cent, or HKD684 million, to HKD11.48 billion.

HPH Trust recorded a marginal dip in total throughput for 2018 over 2017, though volumes for Yantian International Container Terminals (YICT) posted growth on the back of higher US and transshipment cargoes.

The company handled a total of 24.03 million TEU last year, inching down 1 per cent compared to 2017. Throughput at YICT was recorded at 13.41 million TEU, up 3.8 per cent year on year, while throughput at Hong Kong International Terminals (HIT), Cosco-HIT and ACT (Asia Container Terminals) - collectively as HPHT Kwai Tsing - came up to 10.62 million TEU, down 6.6 per cent.

'YICT's full year throughput growth was mainly attributed to growth in the US and transshipment cargoes. The drop in HPHT Kwai Tsing's throughput was mainly due to reduction in transshipment cargoes,' HPH Trust said.

'The overall trend in outbound cargoes to the US was positive in 2018. Full year growth in US outbound cargoes was 5 per cent; with 2018 fourth quarter growth increasing to 10 per cent driven by the frontloading of cargoes in anticipation of the 25 per cent tariff implementation originally scheduled for January 2019 by the US to Chinese exports. On the other hand, outbound cargoes to the EU was weak in 2018 and below 2017 by 1 per cent,' the trust stated.

HPH Trust says 'further structural changes to container shipping lines are anticipated. While the creation of further cost sharing alliances is not expected, further deployment of mega vessels will continue necessitating investment in port equipment and processes by deep water port operators handling these vessels'.

HPH Trust believes that the formation of the Hong Kong Seaport Alliance, announced in January between HIT, Cosco-HIT, ACT and Modern Terminals Limited, will enable better vessel berth planning and deployment and costs efficiencies to be achieved. The alliance will collaborate to operate 23 berths across eight terminals in Kwai Tsing.