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.
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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.
