The company continues to enjoy a favourable volume recovery after transitioning successfully to a new baseline and transshipment volume in 2018, says group MD
by FARA AISYAH/ pic by MUHD AMIN NAHARUL
HIGHER container volumes handled saw Westports Holdings Bhd’s net profit for the second quarter of 2019 (2Q19) rise 36.54% year-on-year (YoY) to RM166.32 million, higher than analyst expectations of around 34% growth in earnings.
The increase was due to higher gross profit, which was mainly attributed to double-digit growth in container volume and the implementation of higher container tariffs effective March 1, 2019.
Earnings per share for the three months was 4.88 sen versus 3.57 sen in 2Q18, while quarterly revenue rose 15.33% YoY to RM454.45 million.
From April to June, Westports achieved a record-breaking container throughput by handling 2.74 million twenty-foot equivalent units (TEUs), driven by the increase of 1.83 million TEUs in transshipment containers and 0.9 million TEUs for gateway boxes.
Westports group MD Datuk Ruben Emir Gnanalingam Abdullah (picture) said the company continues to enjoy a favourable volume recovery after transitioning successfully to a new baseline and transhipment volume last year.
“The sustained favourable growth at the intra-Asia segment has also supported the company’s container volume growth of 17%, which is well above the industry’s average for container volume. We also set what could be the new world’s record for container terminal productivity by achieving an impressive 801 container moves in one hour during CMA CGM Jean Mermoz’s port of call at Westports,” he noted in a statement to the exchange last Friday.
He added that Westports is expecting to achieve much higher overall container throughput in 2019, despite very moderate industry’s volume growth rate due to the company’s exposure to the still-buoyant intra-Asia segment, as well as the favourable domestic export-oriented sectors.
“Westports is also progressing ahead with planning for the multi billion proposed container terminal expansion as the latter would further strengthen the company and Port Klang’s role as the pre-eminent port for the nation’s gateway trade.
“The eventually enhanced terminal would also reinforce Port Klang as one of the main transshipment hubs in the South-East Asia region for international container shipping alliances,” he said.
For the first half of 2019, Westports’ net profit increased by 24.68% YoY to RM306.22 million.
The six-month revenue rose 11.62% YoY to RM869.64 million. The company has declared a first interim single-tier dividend of 6.74 sen to be paid on Aug 23, 2019.
BIMB Securities Research last Thursday stated that it expects Westports to post higher earnings with a stable margin of about 34% for 2Q19.
The research house said Westports is expected to benefit from the increase in number of lines from shipping alliances — especially with the Ocean Alliance from May onwards — combined with last year’s corresponding quarter’s low base effect from the consolidation of shipping alliances.
The port operator would also benefit from the continued growth in South-East Asian economies, which means greater trade activities for the intra-Asia trade line — an estimated 50% to 60% of the total throughput volume.
BIMB Securities noted that Westports should see a higher margin from the container tariff revision in March 2019, which will see its full higher rate impact in 2Q19.