Page 18 - ar2011_hi

16 // HUTCHISON PORT HOLDINGS TRUST
Dear Unitholders,
Last year was an exciting one for HPH Trust, during
which we listed on the Main Board of Singapore
Exchange Securities Trading Limited (the “SGX-ST”).
Despite economic turbulence in the US and Europe,
the Trust demonstrated a high degree of resilience with
strong results in our frst 9.5 months as a listed entity.
This solidifed our position as the preferred deep-water
ports operator in the Pearl River Delta (“PRD”).
Weakening trade demand prevented us from meeting
forecast throughput for the 9.5 months, but the adoption
of a strong marketing stance, plus a stringent focus on
operational streamlining, enabled us to increase market
share. We are pleased to report that this, together with
pursuit of cost effciencies, ensured that our net proft
was in line with expectations. In addition, our DPU of
37.7 HK cents slightly exceeded forecast, demonstrating
commitment to our promise to pay out 100% of
distributable income for 2011.
Solid foundations ensure resilience
Our stature as an established deep-water ports operator,
strategically located with an effcient and fexible operating
environment, provides the requisite strength to weather
the global economic storm. Uncertainties over the rate
of recovery in the US economy led to depressed trans-
Pacifc trade growth in 2011. The Euro-zone debt crisis
and increasing political tensions in the Middle East
also meant growth in Asia-Europe trade was muted.
However, our market dominance and well-established
presence in these trade lanes, which are the most
valuable global routings, means we are relatively better
insulated from the diffculties experienced by the rest
of the market. We were also able to focus on the rapidly
expanding market of intra-Asia and emerging market
trade, as well as international transshipment growth.
The PRD continued to act as our main cargo source in
2011, during which greater deployment of the option
to manufacture goods inland to reduce costs had no
signifcant impact on our operations. As production
costs at Chinese factories continue to rise, mainly as a
result of increased labour costs and the strong Renminbi,
manufacturers are increasingly turning to more effcient
production methods, rather than relocation, to counter
the trend. At the same time, the Trust has continued
to enhance its hinterland strategy by expanding its
multimodal network and strengthening its barge and rail
connectivity, in order to enlarge its cargo catchment area.
Preferred port-of-call
Shippers and carriers compete to reduce container slot
costs via increased use of mega-vessels for cost saving
purposes. In this regard, the Trust’s ports experienced
a substantial increase in the number of calls made by
vessels with capacities of 10,000 TEU and above. Hong
Kong and east Shenzhen are both natural deep-water
ports, and are therefore preferred ports-of-call for mega-
vessels. Our large number of contiguous deep-water
berths provides an unparalleled platform on which to
manage the operational complexities of servicing several
mega-vessels simultaneously.
We are very pleased that the Trust has obtained the offcial
land title and right-of-use for YICT Phase III. YICT Phase III
now offers the longest contiguous berth in the region
which will further reinforce our position as the preferred
deep-water ports operator in the PRD, and aid our focus
Letter to Unitholders
“With a combined throughput of 21.9 million
TEU, representing 52% of the entire throughput
handled at deep-water ports in Hong Kong and
Shenzhen in 2011, HPH Trust retains its market
leadership of the region.”