HPHT's profits dropped 37.1% to $47.2m in Q3

Lower selling prices kept the revenue flat.

Hutchison Port Holdings Trust (HPHT) is stuck in the doldrums as net profits dropped 37.1% YoY to $47.2m (HK$270.4m) in Q3.

According to OCBC Investment Research, Q3 revenue dipped by 1.3% YoY to $561.94m (HK$3.22b).

Despite the sharp increases in throughput, cost of services rendered during the quarter only showed a 2.4% increase YoY.

Interest and other finance costs increased 36.6% YoY to $41.59m (HK$238.3m), primarily due to higher HIBOR/LIBOR applied on the bank loans’ interest rates.

HPHT's port had more transhipment cargoes as well as additional throughput from a new customer.

Meanwhile, Yantian International Container Terminals' (YITC) throughout gained 14% YoY thanks to growth in the US, Europe, empty, and transhipment cargoes.

However, the average selling price (ASP) for HPHT's Hong Kong ports and YICT dropped by 14% YoY and 4% YoY.

OCBC Investment Research analyst Deborah Ong commented, "The management still keeps to its FY17 DPU guidance of 20 to 23 HK cents, and am more comfortable with the lower end of that range."

"This translates to 5.9% to 6.8% dividend yield against yesterday’s closing price of US$0.435. Looking forward to FY18F, the management expects a much milder decline in ASP and low single-digit throughput growth in Kwai Tsing and YICT," Ong added.