SYDNEY: In order to enable a more meaningful comparison of the operating results of HIT(a) , COSCO-HIT(b) and ACT(c) following the commencement of the co-management arrangement on 1 January 2017, management has restated the % variance of certain key operating profit and loss lines by assuming that 1) the co-management arrangement had been effective as at 1 January 2016; and 2) including 100% of the corresponding operating profit and loss lines of COSCO-HIT and ACT into HPH Trust consolidated results. The resultant impact of these assumptions are collectively referred to as “restated % variance”.
Revenue and other income for the quarter was HK$2,856.8 million, HK$100.7 million or 3.4% below last year. However, the restated % variance on revenue and other income was comparable to last year. Combined container throughput of HIT, COSCO-HIT and ACT (collectively “HPHT Kwai Tsing”) increased by 0.9% as compared to the same quarter in 2016, primarily due to higher transshipment cargoes but offset by weaker in intra-Asia cargoes.
The container throughput of YICT(d) increased by 10.6% as compared to the same quarter in 2016, primarily driven by growth in the US and transshipment cargoes. Average revenue per TEU for Hong Kong and China were below last year mainly attributed to greater volume of concessions offered to certain liners, as well as, certain revisions on tariffs following the mergers and acquisitions of some liners. In addition, China’s average revenue per TEU was also adversely impacted by higher transshipment mix, but partially offset by RMB appreciation.
Cost of services rendered was HK$1,111.2 million, HK$13.7 million or 1.2% above last year. However, the restated % variance on cost of services rendered was 5.6% above last year. The increase was attributed to higher throughput handled, general cost inflations, including the increase in external contractors’ costs, higher dredging cost at YICT and RMB appreciation, but were partially offset by savings in operation costs arising from improved resources’ allocation efficiencies following the commencement of co-management. Staff costs were HK$70.4 million, HK$0.2 million or 0.3% below last year, which were comparable to the restated % variance. Depreciation and amortisation was HK$769.5 million, HK$37.4 million or 5.1% above last year, mainly due to increase in capex spending. Other operating income was HK$14.9 million, HK$66.1 million or 81.6% below last year, mainly due to the deferral of 2017 dividends from River Ports Economic Benefits to 2018 and the aggregated effect of the receipt of an award, a subsidy for railway business development from the Shenzhen government and gain on disposals of tyres by YICT in 2016.
Other operating expenses were HK$137.5 million, HK$27.0 million or 16.4% below last year. However, the restated % variance on other operating expenses were 8.8% below last year, mainly due to savings in general overheads such as computer maintenance and insurance costs. With the aforesaid, total operating expenses were HK$2,073.7 million, HK$90.0 million or 4.5% above last year.
As a result, total operating profit was HK$783.1 million, HK$190.7 million or 19.6% below last year.
Interest and other finance costs were HK$214.7 million, HK$34.4 million or 19.1% above last year, primarily due to higher HIBOR/ LIBOR applied on the bank loans’ interest rates.
Share of profits less losses after tax of associated companies was a loss of HK$38.0 million, HK$40.4 million or 1,683.3% adverse against last year, mainly reflecting the share of HICT after it was acquired at the end of 2016. Share of profits less losses after tax of joint ventures was HK$19.3 million, HK$10.1 million or 109.8% above last year, mainly due to better combined results of COSCO-HIT and ACT following the co-management arrangement.
Tax recorded a net income of HK$51.7 million, HK$139.4 million or 159.0% better than last year, mainly due to lower profit and higher than last year’s tax savings upon confirmation of qualification as “High and New Technology Enterprise” by YICT Phase III in December 2017 compared to YICT Phase I & II in November 2016, but were partially offset by the increase of West Port Phase I’s tax rates after the expiry of its tax exemption period.
The overall profit for the quarter was HK$601.4 million, HK$116.0 million or 16.2% below last year. Profit attributable to unitholders of HPH Trust was HK$237.8 million, HK$148.0 million or 38.4% below last year.
