Transhipment volumes were particularly hard hit, falling 16% to 6.2m teu, which Westports blamed on changes in the container shipping industry, arising from the formation of new global alliances and reconstituted service offerings and port of calls, as well as mergers and acquisitions which kicked in from April. Analysts had been predicting all along that the loss of CMA CGM’s volumes when it moved to PSA in Singapore following its acquisition of APL would hit the operator hard.
Volumes from other segments helped to ameliorate the losses from mainline transhipment however. The Intra-Asia segment showed favourable momentum with strong growth as throughput grew 8%, increasing its contribution to Westports overall volume to 57%.
Gateway volumes also grew strongly, rising 10%, and reflecting Malaysia’s strong exports as Westports helped to facilitate the country’s domestic economic activities.
In terms of finances, Westports noted that it has total outstanding Islamic Medium Term Notes of MYR1.5bn ($381m). Proceeds from its debt exercise were used to part-finance the development of the its container terminal expansion during the year, with capital expenditure for CT8 and CT9 coming up to over MYR800m.
Group md Ruben Emir Gnanalingam said: “The container shipping industry went through unprecedented realignment changes that affected almost all major liners in 2017. In addition to these, the industry witnessed a wave of mergers and acquisitions, of which some of our clients were involved in. These changes adversely affected our total transhipment volume last year, but Westports have transitioned successfully towards serving new services under the Ocean Alliance”.
Ruben noted that construction work at CT8 and CT9 has been completed and with its new facilities, Westports has boosted its container handling capacity to 14m teu a year.
“The added capacity will further strengthen Port Klang as the preeminent port for the nation’s gateway trade, while also being one of the main transhipment hubs in the region,” he added.
For the future, Westports also announced during the year that it had received Approval-in-Principle from the Malaysian government to expand its container terminal facilities from CT10 to CT19 although terms and conditions are still subject to further deliberations.
Looking ahead, Westports said “container throughput is expected to register modest growth rate of low single-digit percentage in 2018”.