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PSA's net earnings surge 59% to $1.9b
Fiona Chan Tue, Mar 04, 2008 The Straits Times
RECORD container volumes and a big one-off gain helped boost PSA International's earnings last year. The port operator yesterday said full-year net profit jumped 59 per cent to $1.9 billion, after it handled a record 58.9 million containers in the year ended Dec 31. It also sold an offshore marine business and European car carrier terminals business, which accounted for 41.6 per cent of the rise in net profit. Excluding this one-off gain, recurring net profit increased 17.6 per cent, PSA said. The bulk of its profits were from port operations, which registered an increase of 17.9 per cent to hit $1.83 billion.

Earnings per share climbed to $3.17 for last year, from $1.99 in 2006.

The contributions from Singapore's port operations - which formed more than half of group turnover - rose 9.9 per cent, while overseas ports posted bigger revenue growth of 14.9 per cent.

The Singapore terminal remained PSA's biggest single contributor with a record 27.1 million containers handled last year, 13 per cent higher than in the previous year.

PSA's terminals in Europe and the rest of Asia also moved more boxes. Volume grew 16.3 per cent to 31.8 million containers last year.

In Europe, the terminals turned in $1.36 billion in revenues, which made up 32.7 per cent of group turnover.

This was a 'modest' 10.6 per cent rise in revenue and came mainly from strong volumes at its Belgium terminals and the contribution from its newly acquired Mersin port, PSA said.

As for China, PSA's terminals grew revenue by 22.5 per cent last year, helped by the newly operational Tianjin terminal.

The group's chairman, Mr Fock Siew Wah, said last year was 'another very good year' for the port operator. He said strong throughput growth helped mitigate shrinking margins and escalating operating costs.

But the year ahead may prove more challenging, said PSA's group chief executive offer, Mr Eddie Teh.

'The growing severity of the United States sub-prime credit crisis and the high price of oil continue to bring about greater uncertainty,' he said.

This in turn may 'adversely impact trade volumes', Mr Teh warned. 'As we tread in 2008, caution is our watchword.'

Last year, PSA's Singapore operation retained its position as the world's busiest container port for the third time in a row, handling 14.8 per cent more boxes. This was on the back of strong Asia-Europe trade, due to growing consumer demand for Asia-made goods.

PSA also said last month that it took a stake in Argentina's second-largest container terminal, International Trade Logistics. With this deal, PSA now has 28 terminals in 16 countries across Asia, Europe and the Americas.

fiochan@sph.com.sg