HPHT posted a full year net profit of HKD528.2 million (US$68 million) in 2019, compared to a loss of HKD11.5 billion in the previous year. Revenue slipped by 3.1 per cent to HKD11.12 billion from HKD11.48 billion in 2018, noting that outbound cargoes to the US 'tumbled considerably' in late 2019.
The trust announced revenue in the fourth-quarter ending December 31, 2019, amounted to HKD2.66 billion, 11 per cent down on HKD2.99 billion in the same three-month period in 2018. It attributed the revenue drop to a 9.3 per cent decrease in container throughput at all its terminals at Kwai Tsing in Hong Kong.
With mainland China making up more than two-thirds of income, the trust noted in its financial statements that it took a hit to outbound cargo to the United States in Q4 2019, amid a trade war between the two countries that saw cargo front-loading in the year-ago period. The box volume at Yantian Inernational Container Terminals, located at Yantian and Shenzhen in China, was 9.2 per cent below Q4 2018.
Even now, the US-China trade spat has been only partially resolved by a Phase One trade deal and "it is not expected the trade dispute can be easily and fully settled shortly", the management said.
It also pointed to the potential disruption of supply chains and global trade, as China stopped business activities to fight the deadly outbreak of a novel coronavirus.
"The global trade uncertainties, exacerbated by the rising cost related to the compliance with new low-sulphur fuel regulation with effect from January 1, 2020, create an unfavourable operating environment for shipping lines.
"While further consolidation of ownership within shipping industry may be limited, increasing coordination among alliance members to optimise fleet and capacity, and on-going deployment of mega vessels to drive cost efficiencies is expected," the management added.