PETALING JAYA: Westports Holdings Bhd is poised to be one of the beneficiaries of the East Coast Rail Link (ECRL) once it is built and ready.
Westports group managing director Datuk Ruben Emir Gnanalingam said that the increased connectivity would help support demand for cargo at its port.
“The added rail connectivity would see more industries being set up along the route, especially along the key stations or stops on the route,” Ruben told StarBiz.
“I don’t think we will benefit much from the construction of the ECRL, but we will benefit from the flourishing of industries and factories along the rail route that will help add to port cargo,” he added.
The ECRL route will connect Port Klang on the Straits of Malacca to Kota Baru in the north-east of Peninsular Malaysia.
The revised alignment will cover Kota Baru-Mentakab-Jelebu-Kuala Kelawang-Bangi/Putrajaya-Port Klang.
Meanwhile, commenting on its capacity, Ruben said that it is expecting capacity to grow by about 3%-8% this year from 9.5 million twenty-foot equivalent units (TEUs) last year.
“We have the capacity for up to 14 million TEUs in the port. We are anticipating that cargo traffic would continue to be driven by transshipment demand in the South-East Asian region,” he said.
Commenting on its capital expenditure (capex), Ruben said that capex requirements this year were quite small and the company had more than enough container capacity at the moment.
“Usually, we would spend about RM50mil-RM100mil on maintenance capex,” he said.
The company in a statement yesterday said its total container throughput improved to 9.5 million TEUs in financial year 2018 ended Dec 31 (FY18).
“Gateway containers increased by 18% to 3.3 million TEUs, as our container terminal supported and reflected favourable domestic economic activities, while transshipment volume registered a slight increase to 6.2 million TEUs,” it said.
Westports also said that it had invested RM2.5bil in recent years to purchase state-of-the-art terminal operating equipment.
It had also invested to construct a contiguous linear berth with a deep draft that would enable its terminal to support clients’ plans of deploying even larger vessels.
“In FY18, Westports accommodated 6,966 container vessels, and the company is berthing more and new ultra-large container vessels. The OOCL United Kingdom, which is the world’s largest container vessel, made its maiden call at Westports in FY18,” it said.
Westports said its intra-Asia container volume grew by 14% to 5.9 million TEUs and this underpinned Westports’ overall throughput growth for FY18.
Moving forward, Ruben said in the statement that the company last year saw favourable volume recovery after having transitioned successfully towards servicing container liners under their current global alliances.
He said that the company would achieve higher overall container throughput in 2019, with growth coming from both gateway and transshipment containers.
“Westports is also finalising the planning details for the multi-billion proposed container terminal expansion, which would strengthen the company and Port Klang’s role as the pre-eminent port for the nation’s gateway trade,” Ruben said.
“The expansion would also reinforce the terminal as one of the key transshipment hubs in the South-East Asian region for international container shipping alliances,” he added.
In FY18, Westports recorded a total revenue of RM1.61bil compared to RM2.09bil in FY17.
Container operations remained the main revenue contributor, as it attained a turnover of RM1.3bil, the company said.
Explaining this drop, Ruben said that there was a change in accounting standards as to how revenue was recognised, which explains the drop in revenue from FY18 from FY17.
Its statement said that despite the higher depreciation charges due to the recently completed container terminal facilities and higher manpower costs for additional staffing requirements, the company attained a record-level pre-tax profit of RM701mil, while it posted a net profit of RM533mil in FY18.
“Actually, we did make more money in FY18. There was also a drop in net profit for us last year (from RM651.51mil in FY17) because the effective tax rate in FY17 was lower after an investment tax allowance from the government,” he said.