HONG KONG's Hutchison Port Holdings Trust (HPH Trust) appeared to go into the red in the last quarter of 2014 due to a HK$19 billion (US$2.45 billion) impairment of goodwill, the first quarterly loss the trust has suffered since listing in 2011, Reuters reports.
The nature of the "goodwill" was said to be a voluntary "write-down of Hong Kong terminal assets, amid mounting concerns that its multi-billionaire owner Li Ka-shing, is retreating from Hong Kong," said the South China Morning Post.
HPH Trust, the Hutchison Whampoa subsidiary that owns Pearl River Delta container ports, said the one-off, non-cash impairment was recognition that Hong Kong operations were "adversely impacted by the uncertainties in the global economy."
Net profit fell one per cent year-on-year in 2014 to HK$2,981.7 million, because of a tax increase, though unitholders earned eight per cent more, the company said.
But a loss of HK$16,018.3 million was reported when including the goodwill impairment in the financial reporting, while the loss attributable to unitholders was HK$17.19 billion.
The trust booked a net loss of HK$1.61 billion for the quarter, and a full-year loss of HK$17,192 million, said Hutchison.
Hutchison Port owns interests in container port assets in Hong Kong and Shenzhen and is backed by Hong Kong's Cheung Kong (Holdings) Ltd.
Compared with 2013, the throughput at HPH Trust's deep-water ports in 2014 increased six per cent, in which the combined throughput of Hongkong International Terminals (HIT) and Cosco-HIT and Asia Container Terminals (ACT) grew five per cent.
In Shenzhen, throughput for Yantian International Container Terminal (YICT) grew eight per cent.
"While outbound cargoes to the US showed an upward trend, EU volumes remained soft. The throughput growth was mainly driven by transshipment, US and empties, but was partially offset by weaker intra-Asia cargoes," the company said.
Separately Hutchison is in talks with a consortium of mainland Chinese companies to sell a HK$160 billion stake in its ports business, reported the SCMP.
The paper, citing a person with knowledge of the situation, said Hutchison was negotiating with China Merchants Holdings (International), state-owned Cosco Pacific, China Shipping Terminal Development and State Development & Investment Corp to sell a 40 per cent stake.
Asked about the report, a Hutchison spokesman said: "The rumour is unfounded." China Merchants, Cosco Pacific and China Shipping could not be reached for comment.