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HPH Trust net profit up 6pc to US$374.2 million as revenues rise 5pc

Global port operator HPH Trust posted a six per cent year-on-year net profit increase to HK$2.9 billion (US$374.2 million) in 2015, drawn on revenues of HK$12.6 billion, up five per cent.

Listed in Singapore, HPH Trust is affiliated with Hutchison Port Holdings Limited (HPH), the global leader in the container port industry by throughput and a subsidiary of CK Hutchison Holdings Limited of Hong Kong.

Singapore-headquartered HPH Trust is managed by Hutchison Port Holdings Management Pte Limited, an indirect wholly-owned subsidiary of CK Hutchison.

HPH Trust said that despite weak market outlook, HPH Trust achieved stable fourth quarter and full year results as management focused primarily on tariffs and costs improvements.

Management remains cautious on expected cargo volume for 2016 given the soft global trade outlook and will continue to focus on improvements to tariffs and costs, said the HPHT statement.

Full year throughput of HPH Trust's deep-water ports was one per cent below last year, said the statement.

Shenzhen's Yantian International Container Terminal's (YICT) throughput grew four per cent year on year, which outperformed Shenzhen's throughput growth of one per cent.

Combined throughput of HIT, Cosco-HIT and ACT dropped six per cent year on year, which did not retard the throughput decline of nine per cent for Hong Kong.

HPHT said outbound cargo to the US showed an upward trend in full year, but lost momentum in the fourth quarter of 2015. The decline in outbound cargoes to Europe continued, but showed some improvements in the fourth quarter.

Throughput growth of YICT was mainly driven by US, transshipment and empties but was offset by a European decline. HIT's throughput drop was mainly due to weaker transshipment and intra-Asia cargo.

The volume of containers handled by HPH Trust is affected materially by the economic performance of the US and Europe,

Outbound cargo to the US was flat in the fourth quarter of 2015. High inventory level affected shipments in the quarter.

The US Federal Reserve raised interest rates for the first time in nearly a decade in December 2015, in response to the strengthening US economy.

"We anticipate a stable US economic outlook for 2016 and a mild increase in US outbound cargoes,?said the company statement.

The European economies continued to be weak in 2015, which resulted in a fall in outbound cargoes compared with 2014. Management does not anticipate a material improvement in 2016

HPH Trust's performance is also dependent on the outcomes of structural changes occurring in the container shipping industry.

To achieve cost advantages, improve efficiency and strengthen overall competitiveness, leading container shipping companies continue to add mega vessels to their fleets, form alliances and broaden vessel sharing schemes.

"HPH Trust's natural deep-water channels and unparalleled mega vessel handling capabilities position it to be the preferred port of call for mega-vessels and HPH Trust is expected to benefit from these developments," said the company statement.