Westports posts jump in first quarter net profit
Group expects major impact from Covid-19 in Q2
PETALING JAYA: A decline in container throughput for Westports Holdings Bhd is expected this year but there is less visibility on the severity, as it hinges on how protracted the economic fallout from the coronavirus (Covid-19) pandemic will be.
While the port operator reported positive results for the first quarter ended March 31, it expects a major impact from the pandemic in April and throughout the second quarter.
Westports recorded a jump in net profit by 9.22% year-on-year (y-o-y) from Rm139.9mil to Rm152.81mil for the first quarter, although it handled marginally lower container throughput.
This was on the back of an improved revenue, which came in higher at 14.04% y-o-y from Rm415.19mil to Rm473.47mil, attributed mainly to the implementation of the container tariff hike from March 1.
Westports handled marginally lower container throughput of 2.52 million 20-foot equivalent units (TEUS) in the first quarter with a noticeable reduction in transhipment containers of 8% to 1.58 million TEUS while gateway volume was at 940,000 TEUS.
Despite lower container volume, the group invested Rm78mil during the period to enhance its container and conventional operations.
It said in a statement that some of the increase in revenue was attributable to construction activities arising from the development work on a new jetty and CT9 container yard Zone Z.
Group managing director Datuk Ruben Emir Gnanalingam said while Westports was hopeful for some recovery in the second half of the year, it did not expect container throughput to register an overall increase this year.
“Malaysia, Singapore, South-east Asia and countries from India to the European Union and North America have various lockdown arrangements or movement restrictions in the second quarter that would have severely curtailed economic activities from consumption to investments to production-related activities.
“This reduction in consumption and capital expenditure at this scale is bound to have an impact on all ports worldwide,” he said in a statement.
Ruben added that the severity of the volume contraction would depend on how protracted the pandemic was going to be and how social and economic activities adjusted to a post-lockdown world.
He said the world was unlikely to be able to consume in the way it used to and it might take a while for it to get to the consumption levels of 2019.
Meanwhile, Ruben said Westports has contributed Rm2.6mil for Covid-19 related support thus far.
“These contributions were mostly allocated towards assisting the front-line healthcare workers with medical equipment and personal protective equipment and also towards assisting families to stay home throughout the movement control order,” he said.