Hutchison Port Holdings’ earnings are expected to struggle in fiscal year 2013, as labor disruption at the Port of Hong Kong is likely to drive up wages and limit Hongkong International Terminals’ subcontracted labor flexibility, according to a report by Citi Research.
Revenue at Hutchison Port Holding’s Port of Hong Kong has been impacted by about HK$100 million (about US$12.9 million) since dockworkers and crane operators at the port began striking on March 28. The revenue impact represents less than 1 percent of the total estimated fiscal year 2013 earnings before interest, taxes, depreciation and amortization, assuming a 50 percent-type margin.