Salalah Port’s profit falls on weak vol­umes and higher taxes

Muscat Daily - - BUSINESS - Our Cor­re­spon­dent Mus­cat

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.

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