Page 26 - ar2011_hi

24 // HUTCHISON PORT HOLDINGS TRUST
Financial and Operational Review
The Trust was constituted on 25 February 2011 and the acquisition of assets and business
undertakings of our initial portfolio was completed on 15 March 2011. Consequently, the fnancial
period was from 25 February 2011 to 31 December 2011 but there were no operating activities
for the period prior to 16 March 2011. As part of the listing exercise, the Trust provided forecast
fgures for 2011 (“2011F”) which can be found in the IPO Prospectus.
Summary of Financial Results
Revenue and other income for 2011 stood at HK$9,735
million, which is 4.8% below the forecast for the same
period. Due to the weakness of global trade demand and
economic uncertainties, the container throughput volume
at HIT and YICT was 2.5% and 7.4% below forecast
expectations respectively. The effects were industry-wide,
but we were able to mitigate the impact and gain market
share from our competitors due largely to our superior
deep-water ports facilities and domination of the valuable
Europe-Asia and US-Asia trade lanes. This is heartening
for the Trust at a time of increased challenges across
the board.
A further encouraging development is that total operating
expenses for the period came in 7.1% lower than forecast
as the Trust launched cost saving initiatives and continued
to streamline its operations for greater effciency. The Trust
also recorded lower depreciation and amortisation
expenses as a direct result of the fnalisation of the price
allocation from the acquisition of the Trust’s business
portfolio at fair value.
As the interest rate environment continues to be
favourable, the Trust’s interest and other fnance costs
dipped 22.1% below the forecast for the period. Notably,
the Trust was able to re-fnance the HK$2.8 billion bank
loan of YICT at a competitive rate, which lends testament
to its sound credit rating.
Proft before tax, after taking into account share of profts
less losses after tax of associated companies and jointly
controlled entities, was 3.6% above the forecast at
HK$3,443 million. Overall, the healthy performance can
be attributed to cost effciencies as a result of superior
management and scale of our operations in HIT and YICT.
2011A
HK$’M
2011F
HK$’M
%
Fav./ (Unfav.)
Revenue and other income 9,735 10,231 (4.8%)
Total operating expenses 6,017 6,475 7.1%
Proft for the period 3,018 3,013 0.1%
Proft attributable to unitholders 1,970 1,880 4.8%
Total distribution 3,283 3,257 0.8%
DPU for the period (HK cents) 37.7 37.4 0.8%
Tax came in at HK$425 million, which was 37% above
the forecast, mainly due to the reduction of accounting
tax credits on the additional depreciation and amortisation
arising from the acquisition of the Trust’s business
portfolio. As a whole, profit for the period ended
31 December 2011 was HK$3,018 million, in line
with the forecast. Net profit margin stood at 31%
and earnings per unit attributable to unitholders slightly
exceeded forecast at 22.6 HK cents.
Funding and Borrowings
In March 2011, the Trust raised gross proceeds of
US$5.45 billion from the initial public offering and issue
of units to Cornerstone Investors1. The entire amount
of the proceeds has been applied fully towards part
settlement of the consideration for the acquisition of the
container port business from HPH and the assignment
of certain related party and shareholders’ loans
(“Acquisition”). The remaining balance amount of the
cash consideration for the Acquisition was funded out
of the US$3 billion bank loan raised in March 2011.
As at 31 December 2011, HPH Trust’s outstanding bank
loans were HK$29.3 billion, with an effective interest
rate of 1.6% per annum as at 31 December 2011.
Details of the bank loans are set out on page 87 of the
Annual Report.
Distribution
The Trust stood by its commitment to pay out 100%
of its distributable income for the fnancial period
ended 31 December 2011, with DPU at 37.7 HK cents,
slightly exceeding our forecast. The management
believes the Trust is on track to meeting its projected
DPU for 2012.
1 As defned in the IPO Prospectus