Revenue and other income for the period was HK$4,776.7million, HK$647.1million or 11.9% below last year. Combined container throughput(a)of HIT(b), COSCO-HIT(c)and ACT(d)(collectively “HPHT Kwai Tsing”) decreased by 2.9% as compared to the same period in 2019, primary due to the decrease in intra-Asia, US and transshipment cargoes. The container throughput of YICT(e)decreased by 12.2% as compared to the same period in 2019, primarily driven by the decrease in the US, EU and empty cargoes. Average revenue per TEU for Hong Kong was below last year, mainly attributed to the increased transshipment mix and write-back of agency fee provision in 2019following the finalisation of tariff negotiation. Average revenue per TEU for China was comparable to last year.
Cost of services rendered was HK$1,567.4million, HK$333.3million or 17.5% below last year. This was attributed to lower throughput, savings arising from SPA arrangement and cost control initiatives, RMB depreciation and reduction in operating costs due to PRC government’s supportive measures to COVID-19, but partially offset by the general cost inflations, including the increase in external contractors’costs.Staff costs were HK$128.3million, HK$19.9million or 13.4% below last year primarily due to lower headcount, RMB depreciation and reduction in staff costs due to PRC government’s supportive measures to COVID-19, but partially offset by general cost inflations. Depreciation and amortisation was HK$1,524.4million, HK$19.7million or 1.3% below last year. Other operating income was HK$64.8million, HK$21.9millionor 51.0% above last year. The increase was largely due to the wages subsidy from the Hong Kong Employment Support Scheme and gain on disposal of fixed assets.
Other operating expenses were HK$252.4million, HK$13.7 million or 5.1% below last year, mainly due to savings in general overheads such as business promotion and travelling expenses.
As a result, total operating profit was HK$1,369.0 million, HK$238.6million or 14.8% below last year.
Interest and other finance costs were HK$428.2million, HK$117.3million or 21.5% below last year, primarily due to lower LIBOR applied on the bank loans’ interest rates and lower interest cost after loan repayment.
Share of profits less losses after tax of associated companies was a loss of HK$43.1million, HK$3.4million or 7.3% better than last year mainly due to better performance of HICT.
Review of performance(Continued) Share of profits less losses after tax of joint ventures was HK$21.2million, HK$0.3million or 1.4% above last year.
Taxation was HK$239.9million, HK$23.8million or 11.0% above last year, primarily due to the increase of tax rates upon the expiries of “High and New Technology Enterprise” status of YICT Phase III, but partially offset by lower profit.
Overall, profit was HK$679.0million, HK$141.4million or 17.2% below last year. Profit attributable to unitholders of HPH Trust was HK$212.4million, HK$21.0million or 9.0% below last year.
Material changes in statement of financial position and consolidated statement of cash flows
Please refer to footnotes of 1(b)(i) and 1(c).
Where a forecast, or a prospect statement, has been previously disclosed to unitholders, any variance between it and the actual results.
No forecast statement for the financial year 2020has been disclosed.
Commentary on the significant trends of the competitive conditions of the industry in which the Group operates and any known factors or events that may affect the Group in the next reporting period and the next 12 months.
The COVID-19 outbreak early this year has spread rapidly worldwide. Precautionary and control measures such as border control, city and regional lockdowns and closure of businesses in many countries including the US and Europe have led to a sharp deceleration of economic activities. Manufacturing in China was at a standstill as factories completely suspended production after the Chinese New Year. Global supply chains and business activities have been disrupted, resulting in a slump in global cargo volume.
HPH Trust, with HPHT Kwai Tsing being a major transshipment hub in the region,and YICT being the premier gateway to China for foreign trade, was inevitably affected. Outbound cargoes to the US and Europe fell to register a double-digit year-on-year fallin the first half of 2020. The throughput decline in the first quarter was 4% at HPHT Kwai Tsing and 16% at YICT. However, in the second quarter, the decline was significantly less -1% at HPHT Kwai Tsing and 8% at YICT with June in particular seeing encouraging improvement.
Based on the latest developments, manufacturing in China has mostly resumed and many overseas countries have loosened lockdown and border controls.It is expected that the negative impact of COVID-19 on our volume will gradually be reduced.
During this difficult business environment, HPH Trust has been exploring different initiatives to improve performance. HPH Trust remains vigilant about the situation and will continue to focus on operational efficiency and cost management, as evidenced by the formation of Hong Kong Seaport Alliance, to increase the competitiveness of our ports.
To mitigate the sharp downturn in demand caused by COVID-19, shipping lines cut their capacity to maintain rates through an increase in blank sailings and service suspensions. Meanwhile, coordination among alliance members to optimise fleet and capacity continues –HMM joined THE Alliance effective 1 April 2020. Against this backdrop, HPH Trust will continue to build on its strengths and is committed to serving its customers, supporting and complementing this industry shift through its unparalleled mega-vessel handling capabilities and continuous process improvements.
Source: Hutchison Port Holdings Trust