HPH Trust – BT

HPH Trust posts HK14.3cents DPU

It reports net profit attributable to unitholders of HK$653.7m for Feb 25 – June 30

HUTCHISON Port Holdings (HPH) Trust posted a net profit attributable to unitholders of HK$653.7 million (S$101.2 million) for the period Feb 25 (when HPH was constituted) to June 30.

It also announced a distribution per unit (DPU) of 14.3 HK cents.

Compared to the forecast net profit of HK$577.6 million in the trust’s initial public offering (IPO) prospectus, the actual profit figure is 13.2 per cent higher. This works out to earnings per unit of 7.51 HK cents.

Including minority interests, net profit was HK$1 billion, 10 per cent higher than the forecast HK$915.8 million.

Although the results announced yesterday – its first since its listing on March 18 this year – were for the period Feb 25 to June 30, its operating activities were recorded from March 16 onward because the acquisition of the assets and business undertakings of its initial portfolio was only completed on March 15.

Operating profit for the period was HK$1.23 billion, 4 per cent more than had been forecast for the same period.

Revenue and other income for the period stood at HK$3.39 billion, 3 per cent lower than the HK$3.49 billion forecast in the prospectus.

Container throughput at Hongkong International Terminals (HIT) and Yantian International Container Terminals (Yantian) – which are in the trust’s portfolio – came in 2.1 per cent and 2.6 per cent below forecast.

This was attributed to ‘throughput growth being weaker than expected, particularly in the Europe and US trade lanes’, the trust said in a statement yesterday.

On a year-on-year basis, however, the trust saw throughput for HIT and Yantian up 4.6 per cent and 2.1 per cent, respectively.

Yesterday, HPH Trust’s unit price closed 3.9 per cent down, with 52.4 million units changing hands, from 76.5 US cents to 73.5 US cents before the release of the results.

A reason for its price downtrend has been market worries over weak volume growth and the trust’s exposure to the weak US dollar.

A report by UBS Investment Research that was issued on Monday gave the trust a ‘buy’ rating with a target price of US$1.10.

‘We find current yield attractive at more than 8 per cent in 2012E, while we believe it is not likely for dividends to miss although volume missed,’ the report said.

A Bank of America Merrill Lynch report, however, cut the trust’s earnings forecast by 11 per cent for 2011 and by 12 per cent for 2012 – with an ‘underperform’ rating and a 70 US cent target price on the stock, according to Reuters.

Since the trust listed on the Singapore Exchange in March with an offer price of US$1.01 in a US$5.5 billion IPO, its price has trended lower.

Against its first-day closing price of 95 US cents, the business trust has shed almost 23 per cent of its unit price to date.