Latest news with #Westports
The Star
14-05-2025
- Business
- The Star
Westports earnings flow intact on long-term jobs
Westports reiterated its guidance for 0% to 5% volume growth in 2025. PETALING JAYA: Westports Holdings Bhd is hoping the Port Klang Terminal Handling Charge (THC) hike will take place in the second half of 2025 (2H25). However, CGSI Research believes the government may need to assess the impact of the US tariff hike on the country before giving the go-ahead. If the THC hike is indeed implemented in 2H25, as anticipated by Westports, there is upside to its financial year 2025 (FY25) earnings forecast, said CGSI Research. It was reported that the proposed 30% increase in port tariffs for container handling and storage will be implemented in phases over a three-year period. The first phase will see a 15% hike, followed by 10% and then another 5% in the subsequent phases. Westports reiterated its guidance for 0% to 5% volume growth in 2025, although it said that growth will most likely be at the bottom end of the range. CGSI Research said container volumes so far in the second-quarter 2025 (2Q25) from April to the first week of May 2025 have grown year-on-year (y-o-y) in the 0% to 5% range, with gateway and transhipment volumes both growing. UOB Kay Hian Research said Westports has yet to analyse in detail the impact of the tariffs. It is factoring in all negatives/risks and positive events with its mid-single digit volume growth target. Hong Leong Investment Bank (HLIB) Research anticipates continued earnings growth on the back of sustained continued volume growth and an anticipated tariff hike in 2025. It said the recently proposed five-year dividend reinvestment plan is expected to further enhance shareholder value. TA Research said any shock after 90 days when the US tariff pause is over on July 8 would be muted. CGSI Research has a 'hold' call on the stock with a target price (TP) of RM4.36 a share. So does CIMB Securities Research, TA Research, Maybank Investment Bank Research and UOB Kay Hian Research with target prices (TPs) of RM4.50, RM4.72, RM4.78 and RM4.40 a share, respectively. HLIB Research maintains its 'buy' call with a TP of RM5 a share, while Kenanga Research retains its 'market perform' call with a TP of RM4.40 a share. The share closed at RM4.56 in yesterday's trading. HLIB Research made minor adjustments to its FY25-FY26 earnings by a 0.6% rise and a 7.4% fall, respectively, and introduced FY27 earnings at RM938mil. TA Research fine-tuned its FY25-FY26 earnings projections lower by 2.7% to 3.2% after incorporating the audited FY24 earnings into its forecast. CIMB Securities Research said potential rerating catalysts for the stock include upcoming government-approved port tariff hikes, a recovery in transshipment cargo volumes and sustainable gateway volume growth. The potential de-rating catalysts for the stock include a delay in the new port tariff revision by the government, escalation of geopolitical risks in North Asia and the Middle East affecting trade routes, and higher fuel costs. Intra-Asia trade growth and regional realignment could partly cushion the impact of global trade uncertainties, CIMB Securities Research said. Kenanga Research likes Westports for its resilient earnings underpinned by long-term contracts with key clients such as Ocean Alliance. Its long-term growth prospect is driven by the Westports 2 expansion project, and its price competitiveness, ie, lower transhipment tariffs versus peers such as the Port of Tanjung Pelepas and Port of Singapore, the research house said.
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.
The Star
09-05-2025
- Business
- The Star
Westports says long-term growth intact, posts higher 1Q net profit of RM222.46mil
Westports executive chairman Datuk Ruben Gnanalingam. KUALA LUMPUR: Commenting on the impact of the tariffs situation, Westports Holdings Bhd executive chairman Datuk Ruben Emir Gnanalingam said the interim uncertainties and adjustment may put a pause on containerised trade growth. However, a "new equilibrium, Asia's economic dynamism and Malaysia's commitment towards multilateral trade will reestablish a new baseline for sustained future long-term growth", he said in comments accompanying the port operator's latest earnings announcement. In light of this, Ruben affirmed the expansion efforts of the container terminal at Westports 2 will continue towards completion by 2028. "We anticipate higher demand for terminal handling facilities by the time we commission CT10 into service," he added. In the first quarter ended March 31, 2025 (1QFY25), Westports registered a net profit of RM222.46mil, up from RM204.51mil in the year-ago quarter, translating to an earnings per share of 6.52 sen against six sen previously. The port company achieved a quarterly revenue of RM621.3mil with a container volume of 2.69 million TEUs - underpinned by intra-Asia regional trade, which accounted for 63% of the volume. This compares with revenue of RM543.15mil achieved a year ago in 1QFY24. According to Westport's report, the conventional segment handled and facilitated a throughput of 2.95 million tonnes of bulk cargo, with a notable increase in liquid bulk activities such as palm oil-related products, liquefied petroleum gas and bunker. The company, which maintains round-the-clock operations with a total staff strength of 5,600, saw operational workforce cost rise 7%. Meanwhile, the fuel cost of the company's unsubsidised diesel had the biggest percentage decline as it benefited from lower international oil prices. Westports also noted it had increased payments to the port authority under the extended supplemental privatisation agreement, which commenced on Sept 1, 2024. "The cash flows statement reflected higher service concession-related obligations such as amortisation, finance costs and lease being paid for port infrastructure and facilities," it said.
