Hutchison Whampoa

Hutchison Port profit sinks on one-off costs from ACT acquisition, strike

PUBLISHED : Wednesday, 12 February, 2014, 12:50am
UPDATED : Wednesday, 12 February, 2014, 12:50am

Hutchison Port Holdings Trust, which operates ports in Hong Kong and Shenzhen under Hutchison Whampoa, saw its earnings sink 25 per cent last year to HK$1.67 billion because of a big dip in its Hong Kong operation and the one-off concession to liners after a damaging strike last summer.

The Singapore-listed company said fourth-quarter earnings plunged 47 per cent to HK$334.8 million.

Higher depreciation costs due to the acquisition of Asia Container Terminals in Hong Kong last year and the one-off compensation for the service disruptions during the strike to liner companies affected earnings.

Revenue fell 0.3 per cent to HK$12.4 billion for the year.

Gerry Yim Lui-fai, the chief executive of HPH Trust, said improvement in the economies of the United States and Europe would help shore up cargo demand in Hong Kong.

Container throughput at Hongkong International Terminals, which operates 12 berths at Kwai Tsing, dropped 12.4 per cent last year mainly because of a fall in transshipment cargo for the US and Europe. Up to 70 per cent of cargo in Hong Kong is transshipped to other places.

Port operations in Yantian, east Shenzhen, handled 1.2 per cent more cargo last year although cargo handling rose 4.7 per cent in the fourth quarter.

"The throughput growth at the ports in southern China is expected to have low single-digit growth for this year as world trade recovers," said Geoffrey Cheng, the head of transport at Bocom International. "The actual growth rate, however, would depend on how many of the production lines are retained in southern China."

The port operator said it was in discussion on new service arrangements with French liner company CMA CGM and Mediterranean Shipping Co, the two consortium members of the proposed shipping alliance P3, which also includes Maersk.

P3, which is scheduled to be running from April, will lead to a consolidation in sailings to Hong Kong as Maersk is served by another port operator, Modern Terminals.

Yim said different terminals would serve different kinds of vessels and there should be no price war.