Malaysia’s largest listed port operator sees good profitability in 2021

In spite of external economic and supply chain challenges.

The largest listed port operator in Malaysia, Westports Holdings, posted a profit after tax of RM808.22 million (US$193 million) for the financial year ended December 31, 2021, a rise of 23 percent from RM654.49 million recorded in the financial year 2020. The company’s profit before tax climbed 20 percent to RM1.04 billion compared to RM865.07 million in its financial year 2020.

“The increase in profit was due to higher container revenue and progressive insurance reimbursement for the vessel incident which damaged two STS cranes and wharf in 2019, Westports said in a filing to Bursa Malaysia stock exchange on January 27, 2022. 

The company, located in Port Klang along the Straits of Malacca, is involved in container and conventional cargo handling as well as providing a wide range of port services, including marine, rental and other ancillary services.  It was listed on the Main Market of Bursa Malaysia Securities on October 18, 2013. 

The group MD of Westports Holdings, Datuk Ruben Emir Gnanalingam bin Abdullah, said the company managed to achieve a good level of profitability despite the external economic and supply chain challenges. “However, one-off insurance recoveries in 2021 amplified the bottom line because we made the corresponding write-offs for the two-year-old incident,” he said in a statement on January 27.

The basic earnings per share (EPS) increased 24 percent to 23.7 sen for the financial year 2021 from 19.19 sen in 2020.  The company paid the first interim dividend amounting to RM290 million in August 2021. The second interim dividend of 9.28 sen per share, amounting to RM316 million, will be paid on February 24, 2022. 

Meanwhile, Westports’ total revenue grew to RM2.02 billion in financial year 2021 from RM1.97 billion recorded in 2020. Operational revenue increased eight percent to RM1.98 billion compared to that of financial year 2020. The container segment contributed 88 percent to the operational revenue with a throughput volume of 10.40 million TEUs.

The company projects a low single-digit positive container throughput for 2022. “The forecast nevertheless entails a cautionary note that the pandemic is still evolving, and regulatory responses abroad could indirectly affect our throughput recovery trajectory,” Westports said. 

For the fourth quarter of 2021, Westports registered an increase of 36 percent in profit after tax to RM222.88 million from RM163.49 million recorded in the previous corresponding period. Lower effective tax rate also contributed to the profit after tax. 

Westports’ profit before tax for the fourth quarter 2021 rose 22 percent to RM265.16 million from RM218.18 million recorded in the previous corresponding period.

Basic EPS for the fourth quarter of financial year 2021 rose 36 percent to 6.54 sen from 4.79 sen in 2020.  

Revenue for the fourth quarter of 2021 slipped to RM503.9 million from RM541.54 million in the previous corresponding period as container throughput was adversely affected by the massive flash flood in Klang Valley. 

Operational revenue grew four percent to RM494 million in the fourth quarter ended December 31, 2021 from that of the fourth quarter in 2020. 

Ruben said the December 2021 heavy rainfall caused severe flooding in certain areas within the Klang Valley, but there was no flooding within the terminal. 

“All terminal operating equipment and essential facilities were unaffected. However, we will remain vigilant and ensure that the terminal’s operations remain unaffected by the growing risk of unusual weather events brought on by climate change,” he said.

Westports said it handled a container throughput of 10.40 million TEUs in 2021. “The year was characterized by challenging domestic economic conditions due to the cumulative effects of various movement restrictions since 2020. Meanwhile, regional countries that imposed restrictions inadvertently contributed to the distressed global supply chain and port congestions,” the company said.

Westports also said that it handled transhipment and gateway container throughput of 6.75 million and 3.65 million TEUs, respectively. “Despite expanding the total yard storage capacity, the terminal experienced occasional congestions,” the company added.

According to Westports, over the two years from 2020 to 2021, it invested more than RM100 million to increase the total ground slots at the container yard by 12 percent to 52,455. The capacity to accommodate refrigerated containers grew by 58 percent to 4,132 reefer sockets.

Westports also enhanced its conventional operational capabilities. The company completed the new jetty for the Liquid Bulk Terminal that can accommodate Very Large Gas Carriers (VLGC). In total, capital expenditure amounted to RM371 million in 2021. 

Ruben also said that Westports invested RM3.8 million towards the pandemic and corporate social responsibility (CSR)-related contributions.  “More importantly, in the second year of the pandemic, CSR gained prominence. Besides Covid-19, the sudden flood in December 2021 gave us the privilege to extend our helping hand to the community,” he added. 

Meanwhile, MIDF Research said it is lowering its throughput growth estimate for Westports to five percent year-on-year which translates into a volume projection of 10.9 million TEUs for 2022.

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