Westports Q3 earnings down 5.6% on absence of investment tax allowance

November 9, 2018 | By | Reply More

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PETALING JAYA: Westports Holdings Bhd’s net profit declined 5.6% to RM142.32 million in the third quarter ended Sep 30, 2018, from RM150.82 million a year ago, attributed to lower effective tax rate in the previous corresponding quarter due to investment tax allowance claim.

Its revenue for the quarter also declined 15.2% to RM417.55 million from RM492.28 million, mainly attributed to adoption of MFRS 15 from Jan 1, 2018.

For the nine months period, its net profit decreased by 11.9% to RM387.93 million from RM440.53 million in the same period a year ago, while revenue fell 21% to RM1.2 billion from RM1.51 billion.

Westports group managing director Datuk Ruben Emir Gnanalingam said in a statement that the company’s transhipment volume was adversely affected in the previous year, especially by the formation of new global alliances and mergers and acquisitions among the container shipping lines.

“During the third quarter of 2018, after five consecutive quarters of declines, Westports has successfully and fully transitioned towards the new baseline as transhipment volume registered an improvement of 12% over the previous corresponding period,” he added.

Additionally, he said the port’s total container volume increased strongly by 14% during the third quarter of 2018 over the previous corresponding period as strong domestic economic activities spurred gateway volume’s momentum further as it increased by 19%.

For the nine-month period ended Sep 30, Westports handled 6.95 million TEUs of containers.

On container terminal expansion in the coming years, Ruben noted that, “Westports has successfully bid for, and is now making instalment payments for the 154- hectare land adjacent to CT9.”

He said the company is also evaluating the possibility of acquiring a second piece of adjacent land to facilitate the proposed expansion in the future.

Westports currently has a total container handling capacity of 14 million TEUs per annum, accommodating the largest container vessels of almost 21,000- twenty-foot-equivalent units (TEUs).

Ruben further noted that the future proposed expansion will further strengthen Westports and Port Klang as the pre-eminent port for the nation’s gateway trade and also as one of the main transhipment hubs in the region.

On the trade tariffs imposition by some major trading nations, Ruben said despite higher tariff barriers in the recent months, trans-Pacific and overall container volume has remained favourable as there could be some front-loading shipments.

“Nevertheless, global international trade has contributed much to unprecedented economic prosperity, but some fine-tuning may be needed to support the less well-endowed segment of the population. The economics of trade remained as the foundation and preferred paradigm for growth,” he added.

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