PSA posts 46pc slide in 2008 profit, after Jekyll & Hyde year

GLOBAL terminal operator, PSA International Pte Ltd and its subsidiaries, have posted a net profit for full-year 2008 after tax of S$1.04 billion (US$$689 million), representing a decrease of 46.2 per cent compared to the previous year.

The lower profits were blamed on lower yields, higher operating costs, impairment provisions and lower divestment gains.

Group revenue increased 5.8 per cent in 2008 to S$4.39 billion while operating profit fell 23.2 per cent against 2007 to S$1.21 billion.

On the other hand, PSA group container volumes grew 7.3 per cent in 2008 from a year ago to reach 63.2 million TEU, according to a company statement.

Strong growth up to July 2008 was rapidly eroded by the collapse in demand on major trade lanes in the last quarter of the year, the company said.

PSA flagship terminal in Singapore handled 29 million TEU in 2008, growing seven per cent year-on-year, helping Singapore maintain its premier position as the world's busiest container port for the fourth consecutive year, while PSA's terminals outside Singapore recorded a throughput of 34.2 million TEU in the same period, 7.7 per cent higher than that in 2007.

2008 was shaping up to be another record-breaking year for the PSA group with the first seven months bringing strong volume surge and record volumes handled. Unexpectedly, the group experienced a sharp and abrupt business decline in the latter part of 2008 as the global financial crisis rapidly deteriorated into a major global slump and recession, said PSA International chairman Fock Siew Wah.

Against the bleak and gloomy backdrop prevailing since then, PSA was fortunate to have had a strong first seven months that provided cushion and enabled us to end up with reasonably credible financial results as a group, he said.

PSA International CEO Eddie Teh blamed the Jekyll and Hyde personality of 2008 for the weaker profits: I see an extremely tough and increasingly challenging year in 2009, with more and more economies falling prey to the collapse of the financial systems, and global trade almost grinding to a halt. All eyes are on the rescue and stimulus efforts of governments around the world to prevent further shrinkage to their economies, and to mitigate the severity of the global recession, the success of which will determine the extent of the contraction of global trade flows, and its long-term impact on our industry.

Singapore operations accounted for 50 per cent of total turnover vis-a-vis last year's contribution of 51 per cent. Outside Singapore, PSA's European terminals contributed revenues amounting to S$1.4 billion representing 32 per cent of the group turnover.

Revenue from PSA's China terminals remained at four per cent of total turnover while the newly acquired terminals in the Americas contributed three per cent to the total.

Profit from port operations were S$1.4 billion, a decrease of 22 per cent from the previous year. Singapore port operations continued to be the major contributor, posting more than 50 per cent of the profits from port operations.
 

Source: Transportweekly