PETALING JAYA: CIMB Securities anticipates Westports Holdings Bhd
to record low single-digit growth in throughput volume for 2025.
This will be primarily driven by a recovery in transhipment as congestion subsides and volumes stabilise following the phase-out of Zim Integrated Shipping Services Ltd’s contribution in 2024.
In the nine-month period of financial year 2024 (9M24), Westports posted a 7% year-on-year revenue growth, driven by higher throughput volumes from the gateway container and conventional segments.
Gateway container volume made up 45% of Westports’ 9M24 twenty-foot equivalent unit (TEU) – up from 41% in 9M23.
However, this was partially offset by a 5% drop in transhipment volumes due to port congestion issues and compliance with regulatory requirements, said the research firm.
It added gateway cargo volumes are expected to remain strong, supported by a positive economic outlook and robust trade performance. However, growth may be constrained by existing capacity limitations to some extent.
Meanwhile, land clearing for the Westport 2 (WP2) container terminal expansion is currently in progress, with the first terminal CT 10 scheduled to begin operations by the third quarter of 2028.
In the interim, the group is considering implementing a dividend reinvestment plan to partially fund the WP2 expansion.
It noted that the group had secured a RM5bil sukuk programme to finance the WP2 expansion.
According to CIMB, Westports’ shares are trading at a slight discount to the historical price-to-earnings average.
Touching on the new tariff revision, the research firm said it would drive immediate growth in Westports’ container revenues.
“We view a potential hike in port tariffs as immediately earnings-accretive for Westports, given that it would immediately boost its container revenues.
“Westports’ gateway throughput volume has been growing steadily over the past two years, driven by the high conversion of foreign investments into containerised cargoes,” the research firm said in a recent report.
It said the steady growth in gateway container volumes was positive for Westports, given that it offers a relatively higher profit margin compared with transhipment containers.
