HPH Q1 impacted by falling box volumes in Hong Kong

HPH Trust sustained a first quarter net loss of 33% year-on-year to ( HK$48.5m (US$6.1m) off the back of revenues that edged up 0.29% to HK$2.67bn.

While box volumes fell 2% across the Hong Kong and Yantian facilities, it would prove to be Hong Kong that represented the most downward pressure. The combined throughput of HIT, Cosco-HIT and ACT (collectively HPHT Kwai Tsing) fell 10 % year-on-year to 2.411m teu. Conversely throughput was boosted 5% at HPH Yantian in Shenzhen to a new high of 3.060m teu.

HPH had little positive to say about the operator’s prospects in 2019 but the mood was of caution rather than despair:

“In the first quarter of 2019, outbound cargoes to the US were weak, largely resulting from the front-loading of cargoes in the fourth quarter of 2018 in anticipation of the tariff increase by the US on Chinese exports originally scheduled to commence on 1 January 2019. The volume of outbound cargoes to the US is expected to be volatile in 2019 as the US/China trade dispute continues

The company was equally uncertain about the impact of the ongoing trade spat between the US and China, and the sense of a slowing in the global economy.

“Although the threatened tariff increase has been postponed and both the US and China are in negotiation to resolve their trade dispute, management remains cautious on the expected cargo volume for 2019 as the global trade is still susceptible to the macro-economic and political uncertainties. These include the slowing Chinese and EU economies and the yet-to-be-resolved Brexit from the EU. Management will continue to focus on cost discipline and efficiency improvements to better serve its customers.”

On a more positive note, HPH asserted that the period of major disruption caused by the incremental introduction of ever larger vessels and the increasing propensity for large alliances among the liner shipping community had begun to stabilize.

Last but not least, referring to its alliance with other players at Hong Kong Port (the Hong Kong Seaport Alliance unveiled in January 2019), HPH reported solid progress.

“HKSPA has finalised its berth and yard planning strategies to provide enhanced services to customers. The Joint Operating Agreement of HKSPA has been progressively implemented from 1 April 2019, bringing efficiency enhancements and cost synergy to shipping lines.”

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