Westports share price hit by P3 alliance service plans

Westports, which debuted on Bursa Malaysia on Friday, saw its shares fall 5% on Tuesday to close at MYR2.56 per share. According to Malaysian financial website The Edge, the Port Klang terminal operator’s shares had been hit by the report on Seatrade Global yesterday that Port Klang would lose out to the Port of Tanjung Pelepas (PTP) and Singapore in its planned Asia – Europe service routings.

Westports is currently the Southeast Asian hub for CMA CGM, which will be joining Maersk Line and Mediterranean Shipping Co. (MSC) in the proposed alliance. Maersk and MSC hub in PTP and Singapore respectively.

Westports confirmed the potential reduction in the number of services calling the terminal from 10 to six in an announcement to the Malaysian bourse on Wednesday.

“The P3 service routing as announced by CMA CGM Group, if implemented, will result in a revision in port calls. Port Klang currently has 10 services out of the 30 plied by these lines on the Asia-Europe / Mediterranean trade lanes. Following implementation of the P3 service routing, Port Klang will have 6 services out of the 26 being proposed for the Asia-Europe / Mediterranean trade lanes,” Westports said.

The terminal operator said it had not been informed by its customers of any change to their hubbing strategy.

“We do not expect a material impact to Westports as a result of this proposed revision in the near-to-medium term. Throughput volumes at Port Klang do not necessarily have a direct correlation to the number of services or total vessel capacity, rather they are dependent upon volumes carried per service,” it added.

The alliance still requires regulatory approval by authorities in the US, China and Europe.