PETALING JAYA: Westports Holdings Bhd
guides for a low single-digit container volume growth rate in financial year 2024 (FY24) pending a tariff hike approval and expansion of Westports 2 (WP2), says Apex Research.
The research firm said the port operator had experienced yard congestion in the second quarter of this year (2Q24) resulting in higher value-added services (VAS) revenue during the quarter.
This was partly due to the spill-over impact from the port congestion in Singapore where some of the containers to Singapore were redirected to Westports.
“Nonetheless, the group shared that since July, yard congestion has started easing, which bodes well for the group as this frees up more capacity to handle higher volume ahead, especially in anticipation of a seasonally stronger 3Q24 when volume picks up ahead of the Christmas season,” said Apex in a note to clients.
In the 2Q24, Westports reported core profit after taxation and minority interests of RM203.8mil, which brought the first half of this year’s (1H24) profitability to RM408.4mil.
This was driven by higher gateway volumes and VAS contribution due to higher container yard occupancy.
Revenue for the quarter saw 1.9% year-on-year (y-o-y) growth to RM553mil. A first interim dividend of 8.89 sen per share, payable on Aug 21, 2024, was declared.
According to Apex Research, transhipment volume in 1H24 contracted by 3% y-o-y and has yet to show signs of recovery due to weak global trade amid elevated inflation and interest rate environment.
Nonetheless, gateway volume continues to show robust growth where 1H24 volume grew by 11% due to the strong imports as a result of strong inflows of foreign direct investments.
On the WP2 expansion, it remains on track with the group expecting dredging and reclamation work to commence in 4Q24. The first terminal from WP2 expansion – CT10 – is expected to commence operations in 1H28, said the research firm.
Meanwhile, Kenanga Research said the approval for container tariff revision and the WP2 expansion project is expected to be concluded by end-2024 with implementation by 2026, although it could potentially be delayed.
