Westports fourth quarter net profit up 36%

PETALING JAYA: Westports Holdings Bhd has posted a strong growth of 36% in net profit to RM210.98mil for its fourth quarter ended Dec 31 compared with the same quarter a year ago.

The huge jump in bottom line was due to gains from a tax expense that added RM65.55mil to its pre-tax profit in the quarter. In the previous comparative quarter, the tax expense had shaved off RM19.19mil from its bottom line.

It noted in a statement that there was an investment tax allowance in the financial year, following the capitalisation of assets arising from the expansion at CT8 and CT9 in 2017.

“The effective tax rate for the current quarter is lower than the statutory tax rate, mainly due to tax incentives from the investment tax allowance for the capital expenditure incurred for port development works,” the company said.

Pre-tax profit in the quarter fell by 17% to RM145.44mil from RM174.18mil previously.

“Excluding non-recurring expenses, pretax profit has reduced by 10%. The reduction in pre-tax profit was due to a lower container throughput and higher fuel costs for the latest quarter,” Westports said.

Revenue for the quarter was mostly flat at RM573.96mil compared to RM573.26mil pre- viously.

“The container shipping industry went through unprecedented realignment changes that affected almost all major liners in 2017. In addition, the industry witnessed a wave of mergers and acquisitions, of which some of our clients were involved in,” group managing director Datuk Ruben Emir Gnanalingam said in the statement.

“These changes adversely affected our total transhipment volume last year, but Westports has transitioned successfully towards serving new services under the Ocean Alliance,” he added.

Westports said it recorded an operational revenue of RM435.1mil in the quarter, down 7% compared to the previous corresponding period.

The company said this was mainly due to a reduction in container throughput by 13% to 2.22 million twenty-foot equivalent units (TEUs) in the fourth quarter, with local container throughput recording a growth of 15% and the transhipment segment declining by 23%.

The lower performance in the transhipment segment was due to changes in the container shipping industry, arising from the formation of new global alliances and reconstituted service offerings and port of calls, as well as mergers and acquisitions, Westports said.

For its expansion, Ruben said that construction work at CT8 and CT9 has now been completed.

“With the added deep-water wharf, our fleet of new Terminal Operating Equipment and additional staff hired to strengthen our human resources as we operate 24x7 facilities, Westports’ total container-handling capacity has now increased to 14 million TEUs per annum,” he said in the statement.

“The added capacity will further strengthen Port Klang as the preeminent port for the nation’s gateway trade, while also being one of the main transhipment hubs in the region.

“The investment tax allowance applicable on the capitalisation of newly completed infrastructure and additional equipment at CT8 and CT9 in 2017, and the favourable growth of gateway volume, has allowed the group to announce a profit after tax of RM652mil for the year,” he added.

The company said it would pay 75% of its net profit as dividends and a second interim dividend of 7.95 sen per share amounting to RM271.1mil will be paid out.

Moving forward, the company expects Westports container throughput to register a modest growth rate of a low single-digit percentage in 2018.