According to Ong, HPH Trust’s 1Q17 results were in line with expectations.
The container port operator for the first quarter ended March reported a 69.9% slump in earnings to HK$166.9 million ($29.9 million), from HK$554.9 million a year ago. Excluding government rent and rates refund of HK$430.0 million a year ago, earnings were 15.7% lower year-on-year.
Revenue for the quarter declined 6.3% to HK$2.6 billion – accounting for 22.0% of OCBC’s full year forecast.
This was mainly due to a 1.4% decline in container throughput of Yantian International Container Terminals (YICT) on the back of weaker empty and transhipment cargoes.
This was partially offset by a 3.2% increase in combined container throughput of Hongkong International Terminals (HIT), COSCO-HIT and Asia Container Terminals (ACT) – collectively referred to as HPHT Kwai Tsing – on higher transhipment cargoes.
(See: Hutchison Port Holdings Trust’s 1Q earnings per unit falls 70% to 1.92 HK cents)
“We expect the trend seen in 1Q to continue for the rest of the year, with growing outbound cargoes to the US and EU,” says Ong.
According to Ong, HPH Trust is currently trading at a FY17 yield of 7.1%.
In addition, she notes that there is potential upside if it is able to command higher tariff rates for the mega-vessel berths in YICT.
As at 12.11pm, units of Hutchison Port Holdings Trust are trading half a cent higher at 40 US cents.
