Ladies and gentlemen, welcome to the conference call of Hutchison Port Holdings Trust. Interim results announcement for the period end 30th of June, 2023. I will hand over to Mr. Ivor Chow , the CEO of Hutchison Port Holdings Trust. Mr. Chow, please begin.
Thank you. Thank you all for joining our call to talk about the first half results for HPHT. As we have announced the results already, some of you would have seen the presentation, at least briefly. Kind of as expected, the volume has been down compared to last year. I will give my thoughts as to how I see the first half paying, as well as giving you some color as to how I see the second half as well as the full year. I will hand it to Jimmy, our CFO, to talk about the detailed figures a little bit, and then we will move into Q&A at the end. Overall, if you look at just the headline numbers, you see that overall our volume is down 15% year-on-year, with Yantian being down 12% and Hong Kong is down a bit more, 18%.
If you look at the split between U.S. and European trade, you see that U.S. is actually down a bit more than the European trade, and I will talk a little bit about why that is. Obviously, our profit, compared to last year, has been down, both on a total basis as well as an attribution basis. Again, not surprising to us given that storage income has gone down this year compared to last. The throughput has been down, interest cost has been up. These are some of the main factors affecting us, and I will talk a little bit about how I see those moving forward as well. From a DPU standpoint, we are distributing HKD 0.55 per unit as compared to HKD 0.65 in the same period last year.
Certainly, we have about a 15% reduction in our DPU as a result. Obviously, if you look at the bottom line figures, it is down a lot more than the 15%. But as you all know, we are a trust vehicle, and if you look at our underlying cash flow generation, our EBITDA, if you will, it is certainly still quite strong. The decline is a lot less than what the profit level figures is. Hence, despite profit down quite a bit larger, we are only reducing DPU by 15% as of interim. Again, a lot will depend on how things look in the second half before we look at the full year dividend figures. Coming back to throughput figures. Yantian is doing a little bit better than Hong Kong.
From a quarter-to-quarter basis, I would say that volume has been largely the same first quarter and the second quarter between the both ports. However, from a profitability standpoint, second quarter is a lot better than the first quarter for us. Even though you're only seeing the half year number, our second quarter from a bottom-line point of view has improved quite a bit as compared to first quarter. Coming back into U.S.-European trade a little bit. If you looked at the underlying EU trade, it was only down 6% in the first six months, particularly for Yantian. The reason why Europe is faring a little bit better than U.S. is because last year, Europe was down ahead of time before the U.S. declined.
I think from a bottoming out point of view, U.S. has certainly reached bottom and is starting to show some sign of improvement in the second quarter, at the latter part of the second quarter, and will possibly continue the third quarter, and fourth quarter as well. Europe is showing some sign of improvement. The U.S., however, its decline is still continuing into the third quarter. The reason for me saying that is because Yantian, if you look at the third quarter last year, Yantian actually had quite a good month between July, August and September. Record highs as well. The U.S. actually didn't start to decline in earnest until the fourth quarter of last year. Hence, we do expect U.S. trade to continue to suffer a little bit in the third quarter as well.
If you heard me talk about things in the first quarter, I was looking more at the recovery in the second half. I think that has now been pushed back more to the fourth quarter. Third quarter will be largely stagnant like the second quarter we have seen as well. That's reflected in the overall shipping markets. If you've seen freight rates, freight rates have come down from the highs of $10,000, $20,000 per box, now reaching as low as below $1,000 per box coming to the U.S. West Coast. Shipping lines are talking about a general rate increase coming months. But so far, they have been drawing tonnage from the market, but so far, export out of China continues to be fairly weak. We're definitely looking in the fourth quarter for any type of strong recovery.
From an interest rate point of view, interest cost continues to rise for us. As you'll hear Jimmy talking about later on, even though our interest costs have gone up, it has not gone up as much as other REITs in the market or other as affected, because we've been paying down quite a bit of debt over the last five, six years, and that has afforded us to manage our interest costs a little bit further in comparison. Again, we have continued to pay down debt to the tune of about HKD 1 billion a year. We're continuing that. Finally, on the dividend. Again, as I said, the EBITDA generation continues to be quite good in comparison to the profit decline.
I'll pause it there and let Jimmy kind of go through the numbers. I'm happy to revisit some of these points in the Q&A. Jimmy?
Thank you. If I may go through the numbers, taking reference with the investor presentation that we loaded up onto our website. Starting on page nine of the presentation. That shows our throughput trends over the past few years and our throughput for the first six months of the year. In Yantian and Huizhou, in total we handled 6.2 million TEU in the first six months of the year. In Hong Kong, we handled 3.8 million TEU in the first six months of the year. That takes the total of our trust throughput to 9.97 million TEU for the first six months of the year. In terms of percentage change year-on-year, that represents a 15% decrease compared with the first six months of the year. If I may continue with the key financial performance on page 11 of the presentation.
You will see on the left-hand side our overall revenue for the first six months. That is HKD 5.2 billion, which is around 20% lower compared with the first six months of last year. One reason is the throughput decrease that you have seen on the previous slide, and also because of the storage income decrease that Ivor mentioned. As terminal congestions ease, we now seeing the shorter time period that containers stay in our terminal. Therefore, the storage income has decreased correspondingly if we look on a year-on-year comparison. On the pie chart on the right-hand side of the same page, you will notice that our revenue from Mainland China now accounts for around 75% of the total trust revenue. On the next page, you will find on page 12 the total CapEx for the first six months.
We've spent HKD 263 million during this first six months of the year. For the full year, we maintain our target to spend a CapEx of around HKD 500 million, although we will be very prudent in spending our CapEx. The HKD 500 million is roughly at par with what we have spent in the past few years. On page 13, that shows our financial position. You will see that our total consolidated debt has reduced from HKD 27.1 billion at the end of 2022, to roughly around HKD 26 billion as at the end of June 2023. That represents a reduction of HKD 1.1 billion during this period. At the bottom of the page, you will see our net attributable debt. As of June 2023, that would be around HKD 20.3 billion.
By net attributable debt, we meant total debt minus attributable cash, and attributable cash in turn is our consolidated cash minus the cash attributable through our non-controlling interest. On page 14, you would see our distribution per unit. As Ivor mentioned, the distribution per unit for the interim distribution for 2023 is HKD 0.55 . Record date for distribution is the 2nd of August 2023 at 5:00 PM, and the payment of distribution will be made on the 22nd of September 2023. Finally, if I can take you through quickly the summarized P&L for the first six months of the year. That's on page 15 of our presentation. Revenue, as mentioned before, is HKD 5.2 billion. That is 20% lower compared with the same period of last year. If we look at profit from services rendered, that's HKD 1.7 billion.
We have improved our profit from services rendered by 20%, both from a combination of cost initiatives that we have in place. We also benefited from a reduction in throughput and also the relaxation of COVID precautionary measures in mainland China and Hong Kong as they are. Operating profit for the first six months, at HKD 1.6 billion. Interest and other finance cost at HKD 422 million, at 37% higher than the same period of last year. As you may know, the benchmark rate has increased by over 4x during this period of time. However, our interest and other finance cost rose by a smaller amount and a smaller percentage because of the debt reduction, as I mentioned. Also because a large portion of our debt is actually on a fixed rate.
Profit before tax, we have for the first six months, HKD 1.1 billion. Profit after tax at HKD 676 million. The profit after tax attributable to unit holders of HPH Trust at HKD 95 million for the first six months of the year.
Right. I will add a little bit color here on my thoughts on how I see this P&L a little bit as well. Over the last two years during the COVID, the shipping industry has enjoyed fairly good results for the whole industry as a whole. For us at the port, no difference. We have quite a bit of windfall from storage income during the last two years. A lot of that extraordinary profit that we generated over the last year has been used to pay down debt, which, for us, we are in a much better financial position as a result. I have always maintained that once the COVID situation is passed, we would not be able to enjoy some of those windfall gains that we have, much like what the shipping lines had as well.
From my point of view, year-on-year comparison is not. I would not say it is not there, but obviously, investors look at it. I also look at where the trust was prior to COVID, and for us, I look at 2020 during our first half results, and we did look at that. If you look at line-by-line comparison, both operating profit and profit before tax was still ahead what the pre-COVID situation was. Obviously, even interest cost compared to what it was in the first half of 2020 was still comparable, despite interest rate having rise decent that much, and a reflection of the fact that we had paid down so much of our debt during that interim period. Compared to pre-COVID, taxation has gone up because some of the tax exceptions that we have been enjoying in Yantian is largely kind of expired.
From an attributable point of view, because interest cost hit us more and because the intent is actually doing a bit better than Hong Kong, it affects it disproportionately on the attributable basis. Just some more color in terms of how management looks at the P&L for this particular first half. I will pause it there a little bit, and then we will come to Q&A if you have specific questions that you want us to cover a bit more. Thank you.
We will now begin the question and answer session. Participants with questions to pose, please press star one on your telephone keypad, and you will be placed in the queue. To cancel the queue, please press star two.
If there are no questions, maybe I can offer some additional insights as well. Obviously, if you look at the profit decline in the first six months, it is to the tune around HKD 600 million. If I roughly look at that breakdown on shortfall, I would say almost 60% of that is due to storage income that was lost. Then another 15%-20% is due to interest costs. Almost more than 80% of the decline is due to interest and storage income. The underlying operation only affected by about 15% of that decline. That is the number 1 observation that I wanted to share. The other one is, I have been speaking to quite a bit of investors in terms of how they see the Sino-US trade impact to our ports, especially in Southern China.
I have attended the Trans-Pacific Maritime Conference in L.A. this year, spoken to quite a few large shippers, including Target, Amazon, and I actually went to Bentonville to see Walmart as well. My takeaway is that there is a lot of talk about continued decline or decoupling with China and moving to Asia. I actually do not see that as that significant of a factor affecting our volume. Certainly, I can see that new capacity will be increasingly focused in other areas outside of China, such as India, in particular, and Vietnam and Thailand. But I think relocating existing capacity to those countries, I have not seen that much, at least those are not the main reason affecting the volume in the first half.
It's just that U.S. consumption has been particularly weak. Given that, as I've maintained before, during COVID, the American public has spent a lot of their disposable income on goods rather than services. Therefore, during the last two, three years, they've accumulated quite a bit of goods. So after the COVID has been relaxed, including that in China and Hong Kong, goods consumption has certainly calmed down significantly. Increasingly disposable income has gone towards services. Hence, with a lot of these large retailers, they're seeing their warehouse continues to be quite congested. The inventory depletion has been a bit slower than what they expect, and I think that's moving into the third quarter as well. But with some orders coming in, we've seen some recovery in certain segments. I certainly see also electric vehicles being on the rise in terms of export out of China.
We do see that as a growing market segment as well. Again, I think with our business, it's cyclical and for us, management is just focusing on cost at the moment. Eventually, hopefully, we will see some return on export. We're certainly seeing more intermodal coming into Yantian connecting to different services. There has been growth in intermodal services even during the first six months, and that's a segment of area that we've been focusing on as well. But that is a fairly long-term development for us that we're watching out for. But in the short term, we're still extremely reliant on the South China manufacturing base, which is in some way affected by some of the factories moving out of China to Southeast Asia as well. Just to give a little bit more color there. Okay.
If there are no more questions, then I thank you, all of you, for listening in, and I hope to catch up next time. Thank you very much.
We will now begin the questions and answer session. Participants with questions to pose, please press star one on your telephone keypad, and you will be placed in the queue. To cancel the queue, please press star two. Ladies and gentlemen, as there are no further questions, this concludes today's conference call. Thank you for your participation. You may now disconnect.