Hutchison Port (NS8U) H1 2024 earnings summary

Executive summary

• Underlying performance in H1 2024 was strong, with overall throughput up 4% year-over-year, driven by Yantian's 11% growth and robust U.S./EU exports, while Hong Kong volumes declined 7%.

• Revenue and other income rose 2.6% to HK$5,316.8 million, with operating profit up 17% to HK$1,838.7 million and profit attributable to unitholders up 67% to HK$158.1 million.

• Distribution per unit was reduced to HKD 0.05 from HKD 0.055 last year due to higher taxation and rising interest costs.

• Outbound cargoes to the US and EU increased 16% and 11% year-over-year in H1 2024, with e-commerce and major retailers driving Yantian's growth.

• Total comprehensive income attributable to unitholders was HK$20.8 million, reversing a loss in the prior year.

Financial highlights

• Total throughput for H1 2024 was 10.3 million TEU; Yantian and Huizhou handled 6.8 million TEU (+11% YoY), Hong Kong terminals handled 3.5 million TEU (-7% YoY).

• Revenue reached HK$5,316.8 million, up 3% year-over-year; operating profit was HK$1,838.7 million (+17% YoY).

• Profit after tax was HK$817.2 million (+21% YoY); profit attributable to unitholders was HK$158.1 million (+67% YoY).

• CapEx was HK$185 million, 27% lower year-over-year, mainly for maintenance.

• Distribution amount for the period was HK$435.6 million.

Outlook and guidance

• Expectation for Hong Kong's decline to narrow in H2 2024; Yantian projected to remain above last year's performance.

• Early stock replenishment and Red Sea disruptions led to an earlier peak season and increased Hong Kong volumes.

• Full-year DPU will depend on H2 performance and interest rate environment; maintaining last year's DPU is challenging.

• 64% of debt is on fixed rates, mitigating exposure to high interest rates; refinancing HK$7.8 billion in debt by March 2025 may face higher rates.

• Committed to reducing emissions intensity by 30% between 2021 and 2030.