LETTER TO
UNITHOLDERS
“IT IS ESPECIALLY
IN CHALLENGING
TImES THAT THE
UNIqUE RESILIENCE
OF OUR BUSINESS
SHINES THROUGH.”
FoK Kin ning, cAnning
Chairman
LETTER TO uNIThOLDERS
dear unitholders,
AncHored in A seA oF cHAnge
the global economy in 2014 was
weighed down by uncertainties in
the Middle east and europe, rising
deflation and plunging crude oil
prices. as the market leader in one of
the world’s busiest trading hubs, it is
especially in challenging times that
the unique resilience of our business
shines through.
the two economies that impact
the trust the most – the u.s. and
the eurozone – went in opposite
directions last year. while consumer
spending in the u.s. improved, as
reflected in its sustained growth
momentum during the fourth
quarter and a lower unemployment
WFYJ TK
NS )JHJRGJW
YMJ
eurozone’s business activities stayed
sluggish. Consequently, we observed
that outbound cargoes to the u.s.
trended upward, while those to the
eurozone remained muted. Closer
to home, China experienced a slight
contraction on the back of weaker
domestic demand, but witnessed
an unprecedented interest rate cut
in november 2014 and March 2015,
aimed to encourage growth and
lower borrowing costs.
despite significant shifts and
uncertainties in trade and the
world economy since the trust was
established and listed in 2011, we
continued to deliver on our promise
of stable distributions even though
we recognised a one-off non-cash
impairment loss of hK$19 billion
against goodwill. given its non-cash
nature, the impairment did not affect
cash flows, and we distributed 41
hong Kong cents for the full year
FRTZSYNSL YT INXYWNGZYNTS
yield based on the closing price as at
31 december 2014. the trust’s units
remain attractive when compared
with the average dividend yield
offered by sti component stocks.
while the impairment was recognition
of the increasingly challenging
business environment, our debt and
cash positions and the underlying
quality of the trust’s assets remain
resilient. as a matter of fact, the
trust’s port assets outperformed
both regionally and within our home
markets. in March 2015, we were
assigned a ‘Baa1’ issuer rating by
Moody’s investors service, and a
‘BBB+’ long-term corporate credit
rating by standard & poor’s ratings
services. the ratings reflect the trust’s
strong market position in the prd and
the stable cash flows from our deep-
water port operations. with the new
ratings, hph trust has more flexibility
in accessing the debt market, which
provides an alternative source of
capital in addition to bank loans. the
issuance of guaranteed notes could
further improve hph trust’s capital
structure and financing flexibility.
Combined throughput at all our
IJJU \FYJW UTWYX WTXJ KWTR YMJ
year before. against an overall dismal
throughput performance across
ports in hong Kong, hit, CosCo-hit
and aCt registered a commendable
^JFW TS ^JFW NSHWJFXJ RFNSQ^
due to higher transshipment volume.
similarly, throughput at yiCt in
8MJS_MJS WJHTWIJI F WJXUJHYFGQJ
year-on-year rise, against an increase
TK
KTW 8MJS_MJS FX F \MTQJ
throughput growth of yiCt was
mainly driven by transshipment, u.s.
and empty cargoes.
20
C A P I T A L I S I N G O N M O M E N T U M
