Westports registers 11% jump in 1Q earnings

However, firm cautions about container volume ahead

“Westports is committed to maintaining Port Klang as one of the region’s biggest and most competitive mega-transhipment hubs.”

Datuk Ruben Emir Gnanalingam Abdullah

PETALING JAYA: Malaysia’s largest listed port operator, Westports Holdings Bhd, began its financial year 2024 (FY24) with a 11% jump in first-quarter net profit, but cautioned investors of a “low single-digit” container volume growth this year.

In 2023, Westports defied expectations and achieved a record container volume of 10.88 million twenty-foot equivalent units (TEUS), which grew 8% year-on-year (y-oy).

The group, whose share price has climbed by nearly 8% this year, reported a net profit of Rm204.5mil in the first quarter ended March 31, lifting earnings per share to six sen.

Net profit margin in the quarter stood at a strong 37.7%.

Revenue rose almost 6% y-o-y to Rm543.2mil.

This was mainly due to the fact that Westports handled a higher container volume of 5% to 2.67 million TEUS.

“In the conventional segment, the company handled bulk cargoes amounting to 2.76 million tonnes.

“The intra-asia regional trade underpinned Westports’ container volume growth as this trade lane accounted for 68% of the container handled,” the port operator said in a statement.

Executive chairman and group managing director Datuk Ruben Emir Gnanalingam Abdullah noted that the Red Sea developments following the Iranisrael conflict have a marked influence on container shipping.

“Our Asia-europe trade lane experienced lower volume due to the initial adjustments, as liners opted for the longer route around the Cape of Good Hope.

“During the first quarter, the terminal had some peaks and troughs in its utilisation because of disruption to shipping schedules and subsequent vessel bunching.

“However, the adverse effects should taper off once services have been regularised.”

Ruben said Westports will embark on its Westports 2 container terminal expansion programme as it celebrates its 30th anniversary this year.

Last December, Westports entered a third supplemental privatisation agreement with the government and Port Klang Authority (PKA) for the port’s proposed expansion of container terminals (CT) 10 to 17.

The concession period was extended to Aug 31, 2070, covering CT10 to CT13.

Upon completing of the acquisition of the third parcel of underwater land from the Selangor state government and transferring the land to PKA by Aug 31, 2045 for the development of CT14 to CT17, the concession period will be extended from Sept 1, 2070 to Aug 31, 2082.

“The company has arranged a Rm5bil sukuk wakalah medium-term note programme to facilitate the funding requirements.

“Westports is committed to maintaining Port Klang as one of the region’s biggest and most competitive mega-transhipment hubs,” according to Ruben.

Westports did not declare a dividend in the first quarter of FY24.