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HPH Trust sees jump in first quarter profit

HPH Trust sees jump in first quarter profit
Hutchison Port Holdings Trust (HPH Trust) has achieved a significant increase in net profit for the first quarter ended 31 March 2016, thanks to a government rent and rates refund.

Net profit for the first three months was recorded at HKD554.9m ($71.6m), a jump of 94% from HKD285.8m in the same period of last year.

The surge in profit was due mainly to an increase in other operating expenses after factoring in HKD430m in government rent and rates refund from an agreement reached on a final rateable value of certain leased properties for the last years.

Revenue for the first quarter, however, dipped by 7% year-on-year to HKD2.75bn as container throughput declined.

The throughput of HPH Trust’s deepwater ports dropped by 8% in the first quarter compared to the previous corresponding period.

Specifically, the container throughput of Hongkong International Terminals Limited (HIT) fell by 12.1% year-on-year mainly due to weaker intra-Asia and transhipment cargoes. The volumes of Yantian International Container Terminal (YICT) decreased by 1.3% year-on-year primarily due to weaker transhipment and empty cargoes but were partially offset by the growth in the US and EU cargoes.

HPH Trust pointed out that the volume of containers handled was affected by the economic performance of the US and Europe.

“HPH Trust’s performance is also dependent on the outcomes of structural changes occuring in the container shipping industry. HIT, as a regional transhipment hub, has been negatively affected by the rationalisation and restructuring of various global shipping alliances over the past few quarters and is expected to be under volume pressure in the near term,” it said.

Looking ahead, the management remains cautious on expected cargo volume for 2016 given the soft global trade outlook.