Westports Holdings quarter one 2023 revenue of RM503 million came in on the back of a 4% year-on-year (YoY) contraction from container revenue, despite 6% YoY higher throughput volume, as blended yield fell 10% YoY.
This was due to lower storage charges as port congestion eased from the recovery of pandemic-induced supply chain disruptions, said Maybank Investment Bank Bhd (MIBB) in a recent report.
Quarter one 2023 core net profit surged 21% YoY to RM179 million despite higher operating costs, thanks to lower finance costs with a lower total Sukuk outstanding balance and much lower tax expenses.
Quarter one 2023 container throughput volume improved by 6% YoY from a low base, as the port was still recovering from the flood at the port in Dec 2021.
Gateway volume demand continues to be robust, largely driven by competitive exports and foreign direct investments, which have seen commencement of operations of some new manufacturing plants around the ports.
While Westports is optimistic that strong gateway container volume will sustain, it is maintaining its guidance of low single-digit container volume growth for financial year 2023 due to global recession fears. In April, container throughput volume grew 5% YoY.
“We forecast the financial year 2023 estimate container volume growth of 2% YoY,” said MIBB.
MIBB is neutral on Westports outlook at this juncture as they await the new concession to be finalised. Fund-raising activities for Westports 2.0 are expected to start around a year after the finalisation of the concession, which could happen as soon as second half 2023.
Meanwhile, despite having a healthy year-to-date performance thus far, global recession fears and rising interest rates cloud the near term outlook, casting downward pressure on the global trade volume, which could drag Westports’ second half 2023 performance.
