MIDF Research remains positive on Westports

KUALA LUMPUR: MIDF Research remains positive on Westports Holdings Bhd’s outlook despite its lower-than-expected firstquarter results, which represent 20 per cent of the research house’s full-year forecast.

“Although there are various challenges, there are still bright spots in Westports’ outlook. It will likely handle a higher volume of ad hoc containers in the second quarter, arising from realignments by the new shipping alliances.

“While Chinese ports are giving discounts to entice alliances to conduct their realignments there, we understand ports such as Shanghai are currently facing severe congestion issues,” said MIDF Research.

“Operating costs, namely marine and diesel costs, would have likely peaked in the first quarter and trend lower in the coming quarters,” it added.

Westports also told MIDF Research that it was seeing a pickup in high-yielding laden gateway cargo, underpinned by stronger domestic consumption and external trade.

Westports recorded a first quarter core post-tax profit of RM151 million, declining six per cent year-on-year and falling short of MIDF Research’s expectations.