Westports Q2 net profit down 18%

> Port operator proposes 5.4 sen interim dividend, says global industry experienced a ‘sea change’ that affected its transhipment volume

PETALING JAYA: Westports Holdings Bhd’s net profit fell 18.1% to RM121.81 million for the second quarter ended June 30 against RM148.82 million in the previous corresponding period, due to higher depreciation, finance cost and income tax rate.

Revenue contracted 21.4% to RM394.04 million from RM501.44 million.

It has proposed to declare an interim dividend of 5.4 sen per share amounting to RM184.1 million for the quarter under review.

Westports’ first-half net profit declined 15.2% to RM245.61 million from RM289.71 million on the back of a 23.8% drop in revenue to RM779.13 million from RM1.02 billion.

The group said in a statement that its container operations handled a total throughput of 4.5 million twenty-foot equivalent unit (TEU) with gateway containers, reflecting favourable domestic economic activities growth, having increased by 20% over the previous corresponding period.

The latest Container Terminal 9, with an additional 600m wharf and new quay cranes, is being actively utilised after it was completed at the end of the previous year.

Westports’ total container terminal handling capacity is now at 14 million TEUs per annum. For 2018, its container throughput is expected to register modest growth rate of low single-digit percentage.

Group managing director Datuk Ruben Emir Gnanalingam said the container shipping industry experienced a (major) realignment changes in the previous year especially with the formation of new global alliances as well as mergers and acquisitions among the container shipping lines.

“These changes have adversely affected our transhipment volume, but Westports have transitioned successfully towards serving the new services under the Ocean Alliance.

Based on Westports overall improving container volume momentum, we are at the tail end of establishing a new volume baseline, from which we can establish future growth levels.”

Commenting on tariffs imposed by some major trading nations, Ruben cautioned that it could affect global trade flows.

“However, after some initial dislocations, a new equilibrium would emerge, and trade between nations will still be the preferred paradigm for growth”.

Westports shares were down 8 sen or 2.3% to close at RM3.40 yesterday on 581,000 shares done.