Singapore-listed port operator Hutchison Port Holding Trust (HPH Trust) posted a loss of HKD16 million (USD2.06 million) for the financial year ended 31 December 2014.
This represents a huge tumble compared with its HKD3 million profit in 2013, due to the recognition of one-off impairment loss.
The downturn was recorded despite a year-on-year (y/y) revenue increase of 2% in fiscal year 2014 with HKD12.62 million as compared with HKD12.38 million in FY 2013.
“An impairment assessment on goodwill was performed during the period and a one-off, non-cash goodwill impairment loss of HKD19 billion was recognised against the goodwill allocated to a cash-generating unit in Hong Kong,” said Ivor Chow, HPH Trust chief financial officer.
Without the impairment loss, HPH Trust recorded a profit of HKD1.8 million, an rise of 8% y/y in FY 2014, as compared with HKD1.67 million for the corresponding year.
Chow explained that the impairment was caused by uncertain global economy and demand, the challenging trading environment faced by Hong Kong operations, and challenging labour cost pressure.
He told IHS Maritime that port workers’ basic wages are expected to rise by around 5.5% in 2015. Previously, workers had received a 10.1% salary increase, with 6% in their basic pay and around 4.1% in incentives. According to a poll conducted this year, 99% of port workers expressed their willingness to continue their employment with HPH Trust.
Meanwhile, Gerry Yim, CEO of HPH Trust, revealed to IHS Maritime that the company plans to raise its tariffs by 3 to 5%, probably in the first half of 2015.
“This is the first time in many years that HPH Trust increases its tariff in a moderately manner,” Yim said. “The trust has been in talks with the shipping companies and is finalising the details.”
Moving ahead, HPH Trust will continue to focus on its megavessels port-of-call strategy and transhipment approach. In line with these strategies, the company’s Yantian International Container Terminal is scheduled to expand by three berths, one per year until completion in 2017.