Lower Cost, gateway cargo keeps Westports in clearer waters

Posted on : 13-11-2017 | By : sabah today | In : National Business

KUCHING: Earnings of Westports Holdings Bhd (Westports) for the first nine months of financial year 2017 (9MFY17) came in estimates, with core profit after tax (PAT) amounting to RM440.5 million which met analysts and consensus’ expectations.

According to MIDF Amanah Investment Bank Bhd (MIDF Research), this comes as the firm’s third quarter (3QFY17) saw revenue going up by 3.8 per cent year on year (y-o-y) but core PAT fell marginally by 0.4 per cent y-o-y due to the fall in transhipment throughput volume.

“The fall in core PAT was cushioned by an improvement in gateway cargo contribution where the ratio of gateway to transhipment now stands at 30:70 compared to 26:74 a year ago,” it added in a report yesterday.

“It was also aided by lower costs in the container segment that dropped 19.3  per cent y-o-y and lower manpower costs caused by lower overtime claims.”

This comes as the effects of reshuffling alliances are felt, it said, as Westports faced setbacks as the new alliances, the Ocean Alliance and THE Alliance commenced.

“The Ocean Alliance moved their containers to the Port of Singapore (PSA) back in April as its largest member, CMA CGM completed its takeover of Singapore based Neptune Orient Lines (NOL),” it added.

“On the other hand, another of Westports’ largest customers, UASC, did the same as it became a part of THE Alliance after being acquired by Hapag-Lloyd. The Asia-Europe and Asia-America trade lanes saw a decrease in container volumes as a result of this.

“Overall, the transhipment throughput volume recorded a decline by 23.2 per cent y-o-y decline which was the second consecutive drop for the year.”

Nevertheless, MIDF Research saw that Westports’ gateway contribution remained positive as gateway throughput volume continued to improve, expanding by 14.3 per cent y-o-y in 3QFY17 as exports volume surged highest on record, posting 14.2 per cent growth in the third quarter.

“We remain optimistic on the gateway segment in 2H17 amid the +14.5 per cent growth in gross external trade forecasted by our economics team for FY17.

“Tax rate slightly unchanged in 3QFY17. The effective tax rate was slightly unchanged in 3QFY17 at 15.2 per cent. In spite of this, we note that the tax rate has declined from 21 per cent in 1QFY17 and is expected to decline more in the 4QFY17.

“This will follow the capitalisation of terminal operating equipment and wharf.”

All these led the research firm to maintain a murky outlook for Westports’ second half of financial year but, adding that “FY18 will be better”.

“The management of Westports remains cautious, holding on to an expectation that FY17’s overall container throughput could decline between minus seven per cent and minus 12 per cent y-o-y, before flattening out in 2QFY18 and returning to growth from 3QFY18 onwards.

“Our forecasted decline in throughput volume is slightly more upbeat compared to management’s view. This hinges on continued strength in external trade and growth in global container shipping demand.

“Aside from that, Westports could benefit from service updates carried out by shipping alliances, having expanded its container handling capacity via CT8 and CT9 phase 1.”


Malaysia to develop logistics partnership within ASEAN, China & Asia Pacific

Posted on : 13-11-2017 | By : sabah today | In : International Business

HONG KONG: Malaysia will focus on developing and expanding its logistics partnership within ASEAN, China and Asia Pacific countries, says Transport Minster Datuk Seri Liow Tiong Lai.

He said the country was committed to creating a seamless, integrated and interconnected network across land, aviation and maritime transport network, including railways, airports and seaports.

“It is our aim to develop an efficient, productive and business-friendly environment as we transform Malaysia into a logistics hub within the region.

“As a matter of fact, in the World Bank’s ‘Doing Business Report 2017’, we were ranked 23rd for ease of doing business out of a total of 190 economies, ” he said at the Ninth World Chinese Economic Summit (WCES) here today .

Liow, who is also the Honorary Adviser to WCES, was confident Malaysia would eventually be able to improve its rankings as the country’s transport network and logistics sector gradually developed.

He said there was no doubt that transport infrastructure was crucial in promoting increased connectivity across nations.

“It is a key enabler that will certainly open up fresh opportunities for businesses.

“In particular, developing economies in Asia stand to benefit greatly, as market expansion and the formation of new network encourage more inter-trade,” he added.

Furthermore, Liow added that enhanced transport infrastructure would pave the way for a stronger logistics sector, which in turn would serve as the backbone of a nation’s economy.

On the two-day summit themed, ‘Managing Global Uncertainty: Exploring New Opportunities’, organised by the Asian Strategy and Leadership Institute, Liow said: “It is heartening to have international events and summits such as the WCES to inspire us to think deeper and work harder towards achieving economic integration.


Invest in Malaysia, DPM urges global Chinese diaspora (DPM speaking at the 9th World Chinese Economic Summit)

Posted on : 13-11-2017 | By : sabah today | In : International Business

HONG KONG: Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi has called on the global Chinese diaspora to invest in Malaysia.

“Likewise, I hope more investors from Hong Kong will also consider Malaysia as an investment destination and use Malaysia as a springboard into other countries in ASEAN, especially with the signing of the ASEAN-Hong Kong Free Trade Agreement (FTA).

“We can be your fulcrum to the ASEAN market of US$620 million with a combined Gross Domestic Product of US$2.3 trillion, making ASEAN the seventh largest economy in the world,” he told participants of the 9th World Chinese Economic Summit here today.

The deputy prime minister also reiterated the Malaysian government’s continued appreciation to the Chinese community in Malaysia.

Saying that Malaysian Chinese have contributed much to the economic development of Malaysia over the past 60 years, Ahmad Zahid added that Malaysian Chinese have participated in all areas of life in Malaysia and have excelled in all spheres of activities.

The two-day summit themed, ‘Managing Global Uncertainty: Exploring New Opportunities’, gathered government, business and academic and thought leaders here to commemorate and celebrate the 20th anniversary of the establishment of the Hong Kong Special Administrative Region and the signing of the ASEAN-Hong Kong FTA which would complement the China-ASEAN FTA.


US to work with Malaysia to enhance export controls

Posted on : 13-11-2017 | By : sabah today | In : National Business

MELAKA: The US is working together with Malaysia to build expertise and capacity to enhance export control mechanisms between the two countries.

Its Deputy Chief of Mission at the US Embassy in Malaysia, Dean Thompson, said the cooperation would benefit both countries as it would strengthen the economy and deny the entry of goods and technologies that would harm the people.

“When companies and other partner countries know that export controls are firmly in place and effectively monitored, they will not have the confidence to bring in their goods and technology.

“For counter-terrorism cooperation, this (export control) is a key component,” he said.

Thompson said this to reporters after the Counter Proliferation Export Control Prosecution Conference here today.

Royal Malaysian Customs director-general Subromaniam Tholasy officially opened the conference.

The four-day conference, starting today, attracted 30 participants from Malaysian agencies such as the Royal Malaysian Customs, Royal Malaysian Police and Attorney-General’s Chambers.

It is jointly organised by the US Department of Justice, US State Department, Export Control and Border Security Programme, US Homeland Security Investigations and Malaysian partners.

Meanwhile, Subromaniam said, Malaysia was keen to work with the US in terms of export control, specifically in making sure goods going through Malaysia’s ports were safe and secure.

“Malaysia has big ports. For example, Port Klang is the 11th largest in the world so there are lots of goods that go through our port.

“We don’t want terrorists to bring in their goods through our ports because such illicit trade would harm the nation and national security as well as the world,” he said.


Trump praises Najib for coordinating well ASEAN-US dialogue relations

Posted on : 13-11-2017 | By : sabah today | In : International News

MANILA: US President Donald Trump praised Prime Minister Datuk Seri Najib Razak for Malaysia’s role as country coordinator for ASEAN-US dialogue relations.

Trump, in his opening remarks at the 5th Asean US Summit today, said Najib had done an excellent job for carrying out the task in coordinating the relations between Asean countries and US, for the period of 2015-2018.

“I want to thank Prime Minister Najib for the excellent job you have done as coordinator. I appreciate it very much … I really appreciate it, you did coordinate very well with us,” he said.

This year is the 40th anniversary of Asean-US dialogue relations and today, the prime minister presented a report on the progress made throughout the years and future direction between Asean countries and US.

Earlier in the morning, Najib and wife Datin Seri Rosmah Mansor attended the opening ceremony of the two-day 31st Asean Summit and Related Summits by the Philippine President Rodrigo Duterte, who chairs this year’s Summit, at the Cultural Centre of the Philippines in Pasay City, here.

Najib later led Malaysian delegation, which include Foreign Minister Datuk Seri Anifah Aman and International Trade and Industry Minister Datuk Seri Mustapa Mohamed, at the Summit and Related Summits.

Meanwhile, Philippine President Rodrigo Duterte, in his opening remark at the Summit, urged leaders to strengthen their fight against terrorism, piracy and armed robbery in the seas, and illegal drugs that threaten peace and stability in the region.

He also thanked Asean member countries and dialogue partners for providing assistance to his government in liberating Marawi City from terrorist groups who pledged allegiance to the Islamic State.

He added that they were now helping the people get back on their feet and resume their lives.

Duterte also said that the menace of illegal drug trade continued to endanger societies.

Yesterday, hours after arriving here, the prime minister held a 30-minute bilateral meeting with his Japanese counterpart Shinzo Abe.

Tomorrow, the prime minister is scheduled to attend six Related Summits, followed by the closing and handing over chairmanship to Singapore ceremonies before flying home.