Hutchison Port Holdings (HPH) Trust’s throughput in the first half of 2022 was on par with the same period last year, although volumes were up 7% at Yantian International Container Terminal (YICT) in Shenzhen, while its Kwai Tsing terminals in Hong Kong registered a 7% decrease.
YICT’s throughput increase was attributed to a rise in US and empty cargoes while the drop in volumes at HPHT Kwai Tsing was due to lower local and transhipment cargoes.
Although HPH Trust delivered 8% growth in revenue to HK$6.47bn (US$820m), high oil prices exerted pressure on operating costs, partly causing profit before tax to drop by 4% to HK$2.15bn (US$270m).
The reduction in /export cargoes handled in Hong Kong has led to pressure on profitability, according to the operator.
This has negatively affected shipping lines’ preference to use Hong Kong as a transhipment hub, as the flexibility for service rotation reduces.
The number of skipped calls remained high in the second quarter of the year, while global port congestion and unstable vessel schedules are still at relatively high levels compared with historic averages.
HPH Trust noted that the Ukraine war has caused significant global commodity price rises, with high oil prices affecting its operating costs.
In addition, increased prices for other commodities such as wheat have fuelled inflation worldwide, potentially affecting consumer sentiment and negatively impacting international trade volume.
The operator pointed out that a high inflationary environment will lead to a reduction in orders from purchasing managers in the West.
The market is expecting export volume from China to /US to continuously come under pressure during the remainder of 2022, it added.
Nevertheless, despite likely increases in interest rates, HPH Trust noted that the impact on its borrowing costs will be relatively small, as over 86% of its debt has a fixed interest rate.
