Westports expected to spend RM10bil on expansion

Busy port: Shipping containers in Westports in Port Klang. The port operator handled 10.86 million TEUs of containers last year. — AFP

PETALING JAYA: Westports Malaysia Sdn Bhd is expected to fork out RM10bil over a period of 25 years for its proposed expansion of container terminal facilities.

The plan involves 146.4 hectares (ha) in Selangor that it has proposed to buy from Pembinaan Redzai Sdn Bhd.

A Bursa Malaysia filing said the leasehold acquisition, worth RM393.95mil, would facilitate the group’s container terminal facilities expansion comprising CT10 to CT17.

It also involves developing eight additional berths.

The investment would be funded internally, via bank borrowings and fund-raising exercises, Westports group managing director Datuk Ruben Emir Gnanalingam said.

Eventually, the expanded facilities would strengthen Port Klang’s role as the pre-eminent port for the nation’s gateway trade, he said.

In the Bursa filing, the company said if the group is unable to obtain sufficient funds or is restricted from incurring capital expenditure for the proposed expansion, it may not be able to fully complete the proposed expansion or if at all, on a timely basis.

“This may have a material adverse effect on the group’s financial condition, results of operations and growth prospects, ” it added.

Westports Malaysia Sdn Bhd is a subsidiary of Westports Holdings Bhd.

Westports Holdings current container terminal facilities, comprising CT 1 to CT 9, is operating at 77% capacity. It expects to reach full utilisation in the next few years, the filing said. The proposed acquisition/expansion would also cater for the expected long-term growth in the demand for port services, the filing said.

“It is expected to increase Westports Holding Group’s total handling capacity to 28 million twenty-foot equivalent units (TEUs) per annum upon its completion, ” the company said.

The port operator handled 10.86 million TEUs of containers last year.

The increased volume of 14% over the previous year was contributed by transhipment containers, which improved to 7.23 million TEUs, while gateway volume rose to 3.63 million TEUs.

In a separate filing, Westports Holding said net profit fell by 13.8% to RM125.44mil in the fourth quarter ended Dec 31,2019, versus RM145.54mil for the same period last year due to a vessel incident.

Revenue rose by 8.3% to RM452.82mil for the quarter from RM418.01mil.

This was mainly due to growth in container volume and tariff hike. Earnings per share were 3.68 sen compared with 4.27 sen.

Over a 12-month period, Westports Holding’s net profit rose 10.7% to RM590.89mil for financial year ended Dec 31,2019 (FY19) versus RM533.47mil a year ago. Profit before tax increased by 10% to RM774mil from a year ago.

Excluding assets write-off, the growth would be 18%, the group said. Revenue rose by 10.4% to RM1.78bil for FY19 from RM1.61bil a year ago, mainly due to double digit growth of container volume and the container tariff hike effective March 1,2019.

“The company’s improved year-to-date financial results were attributable to higher container volume handled and a modest increase in cost of sales under the new accounting rules, despite impairment made for the vessel incident, ” the group said.

Looking ahead, Westports said the corona virus outbreak has clouded the horizon. Pre-outbreak, it had expected a small single-digit container throughput growth.

The board approved a second interim dividend of 6.26 sen per share for fourth quarter of FY19, amounting to RM213.46mil, to be paid on March 3,2020. The entitlement date for the dividend payment is on Feb 21,2020.

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Westports , expansion , RM10bil , spend , buying , land , Selangor , TEUS , containers ,


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