The business trust experiences a 33.4% reduction at HK$96.9 million (S$16.8 million) for its bottom line in the first quarter, which ended in March 31, 2019. In addition, earnings per unit came in at 1.11 Hong Kong cents, down from 1.67 Hong Kong cents a year ago. On the other hand, revenue increased 0.3%, at HK$2.7 billion.

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According to HPH Trust, its combined container throughput for its Kwai Tsing terminals in Hong Kong reduced by 9.6%, because of a reduction in transshipment charges. However, its container throughput in terminals in Yantian, Shenzhen, grew by 4.6%, due to rise in transshipment cargoes.

Regarding the financial year of 2018, the business trust saw a loss of HK$11.6 billion, as there were non-cash impairment losses. The weak performance in the first quarter of 2019 was because of the weak outbound cargoes to the US, and partly due to the the front-loading of cargoes in the fourth quarter of 2018, as there was the expectation of tariff increase by the US on Chinese exports.

The volume of outbound cargoes to the US is expected to be volatile for this year as the US-China trade dispute continue

IG notes.

What is more, an increasing interest rates environment would result in less-than-expected earnings, cash flows, affecting dividends for HPH Trust as the fixed-rate debt accounts for 36% of its total debt.

Currently, economies are cutting interest rates to address the slow global growth. The lower interest rates could relief the company, providing it with more room for cashflow.