In an announcement yesterday, Westports said it received an unfavourable decision from the Royal Malaysian Customs and Finance Ministry on a tax matter that dates back to 2008.
KUALA LUMPUR: Westports Holdings Bhd
's weaker 1Q18 results were within Kenanga Research expectations as they were impacted by higher taxation and finance costs as well as lower container throughput.
"YoY, the poorer performance was due to (i) lower container throughput by 7%, as a result of the reshuffling of shipping alliances, coupled with (ii) increased finance costs by 22%, following borrowings drawdown of RM350m in FY17," said the research house in its Thursday report.
However, over the longer-term, Kenanga Research expects expansion for CT10-19 to be completed by 2040 and does not believe in further earnings accretive development in the next two to three years.
DT10-19 is expected to double the group's container handling volume to about 30 million TEUs per year.
"We believe the group will be focusing efforts to achieving higher utilisation of its current capacity for now, before pursuing further developments in CT10-19."
The research house lowered its target price slightly to RM3.50 from RM3.60 previously after fine-tuning its forwards growth assumptions.
It maintained market perform on the counter as it views current priced to be fair, having dropped 18% over the past 12 months.
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