A 17% decline in cargo volumes caused by the Covid-19 crisis has seen profits plunge 19% year-on-year at Malaysian terminal operator Westports during Q2 2020.
Westports is one of two terminal operators in Port Klang, Malaysia’s busiest container port. Overall, Westports’ Q2 profits fell MYR134.34 million (US$31.39 million) while volumes fell to 2.28 million TEU. Throughput in H1 2020 totalled 4.8 million TEU, down from 5.27 million TEU in H1 2019.
Cumulatively, Westports’ net profit for H1 2020 was MYR287.15 million (US$67.09 million), a 6% year-on-year reduction.
Westports’ managing director Ruben Emir Gnanalingam “The level of global consumption and economic activities are unlikely to resume immediately to the pre-Covid-19 environment in 2020 as the world adjusts to a ‘new normal’ while the search for vaccines intensifies. The adverse effects on employment and income levels will curtail consumption and the overall economic recovery.”
The terminal handled 3.04 million transhipment containers in H1 2020, while the initial growth momentum for containers cushioned the subdued volume during the Covid-19-related lockdown, allowing gateway volumes to register a 2% year-on-year growth to 1.76 million TEU.
Westports will temporarily adopt a dividend pay-out ratio of 60% to conserve cash as it expects the land reclamation for the expansion of its Port Klang terminal to commence in 2021. The first interim ordinary dividend for the current financial year is MYR172.2 million (US$40.23 million) and is to be paid on 21 August 2020.
Ruben said, “As we enter Q3, economic activities in many parts of the world, including Malaysia, have broadly resumed even though activities involving mass gatherings and air travel are still curtailed or discouraged”.
The port forecasts that as the pandemic changes consumption and business activities, Westports’ 2020 volumes will register a year-on-year contraction.