Profits at container terminal operator Hutchison Port Holdings Trust (HPH Trust) jumped in the first half as suppliers brought forward shipments.
Interim profit increased 21% year on year to HKD 817.2m ($104.6m) from HKD 675.5m.
The Singapore-listed company said throughput was up 4% to 10.4m teu as outbound cargoes to the US and European Union rose by 16% and 11% respectively in the first six months of 2024.
“In the US and Europe, consumer spending remained stable in the first half of the year as reflected by the consumer confidence indicators,” HPH Trust said.
“The earlier than usual stock replenishment in the US ahead of Christmas and the attempt to avoid freight general rate increase contributed to the upward trend of exports to the US and EU in the second quarter of 2024.”
Volumes at its Hong Kong ports were positively affected by the disruption caused to nearby ports, including Singapore, by the Houthi attacks in the Red Sea.
HPH Trust has controlling interests in assets in two of the world’s busiest container port cities — Kwai Tsing in Hong Kong and Yantian Port in Shenzhen, China.
The company expects borrowing costs to reduce in the second half. Some 64% of its debt is at a fixed interest rate.
“Most financial market participants are projecting a decrease in interest rate in the second half of 2024,” it told shareholders.
“Our monthly interest expense would decrease by approximately HKD 1.9m should the interest rate decrease by 25 basis points.”
However, HPH Trust warned that when it refinances its debts — about HKD 7.8bn in November 2024 to March 2025 — the refinancing interest rate may be “significantly higher” than the relatively low rate it enjoys from loans drawn four to five years ago, given the current high interest rate environment.
HPH Trust’s $5.5bn IPO in 2011 is the largest to date in Singapore. Key shareholders include Hutchison Ports (27.6%) and Singapore sovereign wealth fund Temasek Holdings (14%).
