Salalah Port’s profit falls on weak volumes and higher taxes
Salalah Port Services Co (SPSC), which operates and manages Port of Salalah, reported nearly 89 per cent drop in consolidated net profit for the first half of 2017. The company’s net profit for January – June period of 2017 fell to RO303,000 from RO2.67mn in the corresponding period of last year.
Due to changes in Oman’s tax law requiring the company to provide a higher deferred tax liability of RO1.48mn and lack of volumes growth, the results for the first half of 2017 show a drop in profit, SPSC said in directors’ report.
Port of Salalah witnessed a five per cent decline in volumes at the general cargo terminal which handled 6.78mn tons of general cargo during the first half of 2017 compared to 7.15mn tons in the same period of 2016.
The port’s container terminal handled 1.6mn TEUs (twentyfoot equivalent units) during the first half of this year, which is a one per cent increase compared to the same period of last year. The company said the marginal volume growth at the container terminal was due to strong support from one of its major customers despite a challenging business environment.
SPSC said the revenue of general cargo terminal decreased by five per cent in the first half of this year whereas container terminal revenue fell seven per cent. Total revenues decreased to RO25.82mn in the first half of 2017 from RO27.75mn in the same period of 2016.
‘The outlook for Salalah Port for 2017 continues to remain stable although rates continue to be under pressure due to growing competition and continued development of capacity both within and outside the country without any volumes available to justify the same’, SPSC said.
The company said the recently concluded agreements with its major customers were crucial to stop the decline in volumes and have resulted in recovery of container volumes. ‘However, rates are expected to continue to be under pressure in the long-term and therefore requiring significant focus on cost to maintain margins’, SPSC added.