Latest news with #WP2
New Straits Times
7 days ago
- Business
- New Straits Times
Westports earnings outlook bright on container growth, tariff gains
KUALA LUMPUR: Westsport Holdings Bhd is expected to continue earnings expansion on the back of sustained volume growth and container tariff hike in the second half of financial year 2025 (2H25), said Hong Leong Investment Bank Bhd (HLIB). Despite on-going uncertainties on global trade and economies, HLIB said Westports maintains its guidance of mid-single digit growth for container throughput in 2025, after achieving 3.1 per cent growth in 1H25. The bank noted that Westport has not seen any meaningful change in on-going volume and future volume as major liners have not changed their port calling. "The approved tariff hike effective July 15, 2025, Jan 1, 2026 and July 1, 2027, will improve the group's cash flow and partly fund WP2 expansion plan. "Furthermore, the approved five years dividend reinvestment plan (DRP) will be used to partly finance WP2 (Westports 2) as well. "Management is committed to continue its 75 per cent dividend payout policy," it said. Meanwhile, HLIB said Westports reported another strong performance for the second quarter of financial year 2025 with net profit of RM232.2 million, lifting 1H25 to RM454.7 million. This was within HLIB's and the consensus full-year forecasts of 49.5 per cent and 48.4 per cent, respectively. "The growth was mainly driven by higher container value-added services revenue and rental rate. "At current juncture, management is retaining its guidance of mid-single digit growth for container throughput in 2025, post achieving 3.1 per cent in 1HFY25. "Maintain Buy rating with an unchanged target price of RM6.08," it added.
New Straits Times
13-05-2025
- Business
- New Straits Times
CIMB: Westports' container throughput projected to rise by 2.5pct
KUALA LUMPUR: Westports Holdings Bhd's container throughput is projected to grow by 2.5 per cent, supported by the introduction of new services from shipping alliances. CIMB Securities said this growth is also driven by the normalisation after Zim Integrated Shipping Services Ltd (ZIM) exited in 2024, along with possible frontloading activities during the 90-day tariff suspension period. "For example, Westports' Asia-Europe trade volume rose 21 per cent year-on-year (YoY) in the first quarter of 2025 (1Q25) following additional new services from Ocean Alliance, and Asia-America trade volume also grew 16 per cent YoY in 1Q25 partially owing to front-loading activities and underlying demand growth. "Meanwhile, its intra-Asia trade volume declined 7 per cent YoY owing to increasing competition following shipping alliance realignments," it said. Westports has revised its 2025 container throughput volume forecast to remain flat YoY, aligning with 2024 levels and lowering its earlier projection of modest single-digit growth. This adjustment reflects growing global trade protectionism and concerns over a potential broader economic slowdown. CIMB Securities expressed a positive view on the port's Dividend Reinvestment Plan (DRP), seeing it as a sustainable and shareholder-friendly way to raise funds. The plan enables Westports to limit its dependence on external borrowings while preserving a strong balance sheet to ensure timely delivery of key infrastructure upgrades. Meanwhile, HLIB Research made slight revisions to Westports' earnings following its annual report updates, adjusting financial year 2025 and FY26 earnings by +0.6 per cent and -7.4 per cent, respectively. It also introduced a financial year 2027 earnings estimate of RM938 million. The firm stated that the tariff increase will enhance the group's cash flow and help partially finance the Westports 2 (WP2) expansion project. HLIB noted that Westports remains optimistic the government will approve a port tariff increase, primarily for the gateway segment, sometime in 2025. It also highlighted that the 5-year DRP will help fund the Westports 2 (WP2) expansion, with management reaffirming its commitment to the 75 per cent dividend payout policy. "WP2 is progressing well with dredging and land reclamation, with construction to start in the first quarter of 2027 and commence operation by the second quarter of 2028," it said.
