Westports’ Q2 net profit lower by 19%

PETALING JAYA: Westports Holdings Bhd’s net profit for the second quarter ended on June 30, 2020 fell 19% to RM134.34 million from RM166.32 million given the reduction in container and conventional throughput due to Covid-19 and the decrease in operational revenues.

Its revenue fell 6% year-on-year to RM431.60 million against RM454.45 million last year.

For the six months period, its net profit dropped 6% to RM287.15 million from RM306.22 million mainly attributed by the reduction in container and conventional throughput and impairment loss of trade receivables and one-off asset write off.

Its revenue increased 4% to RM905.07 million from RM869.64 million last year partly attributable to construction activities arising from development work on a new jetty and CT9 Container Yard Zone Z.

Westports handled container throughput of 4.80 million TEUs during the first six months of 2020 as the pandemic disrupted economic activities across the world. The terminal handled 3.04 million transhipment containers while gateway’s initial growth momentum at the beginning of the year cushioned the subdued volume during the movement control order (MCO) period to enable gateway containers to register a 2% growth to 1.76 million TEUs.

Westports invested RM135 million in capital expenditure during the first six months of 2020 to enhance its container and conventional operations that would further support the longterm growth of the company and also Port Klang.

Westports will temporarily adopt a payout ratio of 60% to conserve cash as it expects the land reclamation for the multi-billion container terminal expansion to commence in 2021. The first interim dividend for the current financial year is 5.05 sen per share, amounting to RM172.2 million, and is to be paid on Aug 21, 2020.

Westports group managing director Datuk Ruben Emir Gnanalingam said Westports container volume’s modest decline for the six months of 2020 was due to the initial growth momentum achieved in the Q1 this year.

“In the previous quarter, we cautioned that Q2 would experience the most adverse impact of the

Covid-19 pandemic given the various lockdown arrangements or movement restrictions across the world. As we enter Q3, economic activities in many parts of the world, including Malaysia, have broadly resumed even though activities involving mass gathering and air travel are still curtailed or discouraged”.

He guided that the level of global consumption and economic activities are unlikely to resume immediately to the pre-Covid-19 environment in 2020 as the world adjusts to a “new normal” while the search for vaccines intensified.

The adverse effects on employment and income levels will curtail consumption and the overall economic recovery. Hence, the company cautioned that it does not expect container throughput to register an overall increase for the second half of the year 2020.

Ruben added that the momentary pause in the relentless volume growth experienced in recent years incidentally has provided Westports more time to plan and execute the land reclamation phase at a more competitive cost for the mega container terminal expansion from CT10 to CT17.

“Westports remains committed to reinforcing Port Klang as one of the main transhipment hubs in South East Asia for international container shipping alliances”.

source https://www.thesundaily.my/business/westports-q2-net-profit-lower-by-19-BF3135366