Enter your email address:

Delivered by FeedBurner

feedburner count

Friday, August 14, 2009

Hutchison Port Profit Plunges as Recession Saps Trade

Friday, 14 August 2009

Hutchison Whampoa Ltd.’s port unit, the world’s largest container-terminal operator, posted its biggest profit decline in at least eight years and said global trade will “recover slowly” from the recession. Hutchison Port Holdings Ltd.’s first-half earnings before interest and taxes dropped 35 percent to HK$4.49 billion ($579 million), Hong Kong-based Hutchison Whampoa said in a statement today. Sales slid 21 percent to HK$15.6 billion.
The trade outlook is “a continuing challenge” to the port unit’s full-year earnings, Hutchison said. The unit’s overall container volume fell 8 percent in the first six months as U.S. and European consumers pared spending on Asian-made goods because of rising job concerns.
“The first half was really bad,” said Cusson Leung, a Hong Kong-based Credit Suisse Group AG analyst. “The second half may be better as we have already seen a rebound in exports at Shanghai and Shenzhen.”
That may not be enough to prevent a full-year decline in Hutchison Port’s profit, Leung added. The company said it has implemented a cost-cutting program, the full effects of which will only be felt in the second half.
“The worst is over, but it may not be a V-shaped rebound,” Hutchison Whampoa Chairman Li Ka-shing told reporters in Hong Kong today. Industrywide container traffic will decline at a slower pace for the rest of the year, he added.
Profit from Hutchison Port’s operations in mainland China and Hong Kong tumbled 24 percent in the first half amid declining Chinese exports. In Europe, the company’s earnings before interest and taxes fell 40 percent. Asian ports, excluding China and Hong Kong, reported a 22 percent drop.
Overall, Hutchison Port’s terminal operations, which are spread across 25 countries, handled 30.3 million cargo-boxes in the period.
Li Ka-shing
The port unit accounted for 25 percent of Hutchison Whampoa’s earnings before interest and taxes. The parent, controlled by billionaire Li Ka-shing, also invests in oil and gas, cell-phone networks, drug stores and real estate.
Hutchison Whampoa began reporting separate profit figures for its port unit in 2001.
Chinese exports fell 22 percent by value in the first half. Container traffic at major Chinese ports fell 3.8 percent last month, according to the Ministry of Transport. That’s the slowest decline this year.
Hutchison Port, 20 percent-owned by PSA International Pte, has interests in 300 berths in 49 ports worldwide, according to its Web site.
Source: Bloomberg