Li’s Hutchison Port Profit Falls 5% on Depreciation Costs
Hutchison Whampoa Ltd. (13), controlled by Hong Kong billionaire Li Ka-shing, said profit at the world’s second-largest container-port operator declined 5 percent because of higher depreciation charges.
Earnings before interest and taxes was HK$3.45 billion ($445 million) in the six months to June, Hutchison said in a Hong Kong stock exchange statement today. The drop was mainly because of HK$181 million depreciation charges, related to one new berth and expanded facilities in five terminals in Europe, Asia and Australia, the company said.
“The division is expected to maintain a steady performance for the remainder of the year and to resume growth in subsequent years as the new berths and ports reach fully operational status,” Hutchison said in the statement.
First-half sales rose 6 percent to HK$16.9 billion. The Hong Kong-based company handled 37.9 million boxes, 2 percent more than a year earlier.
Hutchison, which has interest in 52 ports worldwide from Panama to the Netherlands, owns 28 percent of the container port operations in Hong Kong and Shenzhen through Singapore-listed Hutchison Port Holdings Trust. (HPHT) Its container volumes at Hong Kong fell 20 percent in the second quarter as a 40-day strike by some of the workers prompted shipping lines to divert vessels to nearby Chinese harbors.
About 450 workers including crane operators and stevedores at Hongkong International Terminals Ltd. walked out March 28, demanding higher wages. That was the longest strike at the city’s container terminal and the biggest labor action against Li, Asia’s richest man. The workers ended their agitation after accepting a 9.8 percent wage increase.
In March, Hutchison Port Holdings bought a Hong Kong box terminal from DP World Ltd. and a unit of PSA International Pte., the world’s biggest operator of container ports. Hutchison Port said it would pay HK$3.2 billion in cash to buy the entire stake in Asia Container Terminal Ltd.
Hutchison Whampoa, with businesses ranging from retail to telecommunications, posted a 23 percent increase in first-half net income to HK$12.4 billion, beating analyst estimates.
To contact the reporter on this story: Jasmine Wang in Hong Kong at Jwang513@bloomberg.net
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