Westports to undertake impairment in coming quarter for berthing collision

WMSB has closed 2 berths as a safety measure after a berthing container vessel collided with 2 cranes

by RAHIMI YUNUS/ pic by TMR FILE

WESTPORTS Holdings Bhd will undertake an impairment or provision in its coming financial quarter ending Dec 31, 2019, which is also its financial year-end, in relation to the cost and damages arising from a berthing collision last month.

However, the detailed procedures and processes involving external and internal parties in determining the actual total cost, damages, recovery or reversal of provision would “unlikely be completed by Dec 31, 2019”, it said in an exchange filing yesterday.

“As all the affected assets have insurance coverage, and Westports Malaysia Sdn Bhd (WMSB) has also obtained an undertaking from the client’s insurer for the damaged assets, the company expects significant recovery from or reversal of provision made for this incident in the future years, thereby nullifying the initial impairment or provision to an immaterial threshold level later,” the group said.

On Nov 11, the group said its wholly-owned unit WMSB had closed two berths as a safety measure and to assess damages after a berthing container vessel collided with two ship-to-shore cranes.

The initial length of the berth closure, which was in place earlier as a precautionary safety measure, has been reduced based on the latest assessed conditions of the two cranes.

The company will also ascertain the repairs needed for the affected berth.

“This incident is not expected to have an overall, or material adverse impact on the container operations, as terminal handling of containers at all the other berths continue as usual,” the group added.

Westports’ net profit rose 11.9% to RM159.24 million in the third quarter ended Sept 30, 2019, from RM142.32 million the year before, helped by increased container throughput and a container tariff hike implemented in March.

Quarterly revenue climbed 10.3% to RM460.43 million from RM417.55 million recorded last year.

Separately, Westports said it handled a record 10 millionth 20-foot equivalent units (TEUs) container yesterday since the beginning of the year, making it the first and the only domestic terminal that has handled 10 million TEUs in a calendar year.

The 10 millionth TEU mark was achieved after the group’s container throughput increased by approximately 14% to 9.89 million TEUs during the January to November 2019 period.

Since container operations commenced in 1996, the company has handled more than 112 million TEUs in the last 23 years.

The group said it’s investing in the deployment of additional terminal handling equipment at Container Terminal 9, and is planning for significant expansions at Pulau Indah to support the long-term growth in the coming decades.

Port Klang, where Westports is located, is the 12th busiest port globally and one of the main transshipment hubs in South-East Asia for international container shipping companies.

According to the Port Klang Authority, Port Klang’s container terminals combined, which includes Westports, could handle 13.25 million TEUs this year and thus maintain its ranking in the World Container League for 2019.