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            december 14, 2019

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IRFC 2020

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Global trade tensions drag down HPH Trust H1 net profit by 26pc


Singapore-listed HPH Trust, Hong Kong's Hutchison organisation's port operating arm, saw its first-half performance continue to be affected by challenges in the global trade environment, according to Shipping Gazette.
The port operator announced that net profit attributable to shareholders dropped 26 per cent to HKD233.4 (US$29.9 million) in the first half of the year ended June 30 compared to HKD315.4 million in the first six months of last year.
HPH Trust reported a one per cent dip in its revenue and other income to HKD$5.4 billion compared to HKD$5.5 billion the year before.
HPH Trust said in its results announcement that the global external environment continues to be challenging, with trade tensions between the United States and China having heightened in recent months, with new tit-for-tat tariffs imposed in the second quarter of 2019.
"Trade protectionism, macroeconomic and political uncertainties, including the slowing Chinese and EU economies and the yet-to-be-resolved Brexit from the EU, threaten the recovery of global trade," it said.
As a result, it noted, outbound cargoes to the US remained weak in the second quarter of 2019 and are expected to be volatile in the second half of this year.
"Given the uncertainties in the global trade outlook, HPH Trust management remains cautious about future cargo trends and will continue to adhere to cost discipline and efficiency improvements in order to face the challenges ahead."
The terminal operator said that its combined box throughput in the first six months of the year was one per cent down from last year. Throughput of its Kwai Tsing terminals was down seven per cent compared to H1 2018, mainly due to the decrease in intra-Asia and transshipment cargoes.
However, the container throughput of its terminals in Yantian, Shenzhen, increased by five per cent from last year due mainly to the growth in empty and transshipment cargoes, but partially offset by the decrease in US cargoes.
Furthermore HPH Trust said: "Coupled with the uncertainties in the global trade outlook and the expected increase in the fuel cost from using low-sulphur fuel from January 1, 2020, it is anticpated that shipping lines will continue to drive cost efficiencies and promote fleet and capacity optimisation.
"The continued deployment of mega vessels will necessitate investment in port facilities and continuous process improvements by deep-water port operators."

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