CK Hutchison Port Earnings Rise Despite Loss Of Panama Terminals
CK Hutchison Holdings increased first-half earnings from its ports business despite losing its Panama operations, while disruption in the Strait of Hormuz diverted cargo to Sohar in Oman. Ports and related services revenue rose 4 per cent to 24.52 billion Hong Kong dollars, with earnings before interest, tax, depreciation and amortisation up 4 per cent and operating profit up 3 per cent.
Container throughput fell 1 per cent to 43.6 million twenty-foot equivalent units after the Panama operations ceased in late February. Excluding Panama, throughput grew 3 per cent, led by Yantian, Shanghai and other Asian terminals. Volumes at the group's separately listed trust rose 5 per cent on higher outbound laden cargo from Yantian to the United States and European Union, while mainland Chinese and other Hong Kong volumes increased 6 per cent.
The Middle East disruption was, on balance, slightly positive for the division. Quayside operations at the group's ports in the United Arab Emirates were halted, but additional ad-hoc transshipment volumes at Sohar more than offset the loss, and storage income rose 8 per cent, mainly in Oman and Pakistan, as cargo dwell times lengthened. Excluding Panama, underlying earnings and operating profit rose 10 and 9 per cent in reported currency. The division ended June with 300 berths, five more than a year earlier, after four opened at Sokhna in Egypt and one at Laem Chabang in Thailand.
Panama took administrative and operational control of the Balboa and Cristobal terminals on 23 February, forcing the group's subsidiary to cease operations. The subsidiary had begun arbitration earlier that month and is seeking more than 2 billion dollars in damages. Capital expenditure across the division rose to 1.86 billion Hong Kong dollars from 1.12 billion.
The dispute continues to complicate the group's proposed sale, agreed in principle in March 2025, of 43 ports with 199 berths across 23 countries to a consortium of two large infrastructure investors and a terminal operator, at an agreed enterprise value of 22.8 billion dollars. A transaction of that scale is difficult to close while one of the assets is the subject of an arbitration claim and a sovereign seizure, and the longer it remains unresolved the more the underlying portfolio's performance — solid, as these results show — becomes a secondary consideration.
