Bintulu Port Holdings Bhd (Bintulu Port) posted higher earnings and revenue for the fourth quarter of 2016 (4Q16) ended December 2016, leading RAM Ratings Services Bhd (RAM) to reaffirm the port’s stable ratings.
The company in a filing to Bursa Malaysia yesterday said 4Q16 revenue increased by 10 per cent year-on-year (y-o-y) to RM166.12 million from RM151.03 million generated in 4Q15 ended December 2015.
Bintulu Port in its accounts notes filed to the stock exchange said the higher revenue were contributed by the liquefied natural gas (LNG), alumina, general cargo and ferro-alloy cargoes.
At the same time, Bintulu Port said 4Q16 net profit grew marginally by 2.7 per cent y-o-y to RM43.16 million from RM42.04 million recorded in 4Q15.
For financial year 2016 (FY16) ended December 2016, Bintulu Port’s revenue gained by 6.6 per cent y-o-y to RM583.62 million from RM547.36 million generated in FY15.
Correspondingly, the port operator said FY16 net profit increased by 17.5 per cent y-o-y to RM149.84 million from RM127.57 million recorded in FY15.
Additionally, Bintulu Port noted its returns from investment of RM27.76 million in 2016 was also higher by RM15.24 million as compared with 2015 of RM12.52 million.
The higher returns from investment was thanks to the investment of excess fund available from the proceeds of Sukuk issuance.
Meanwhile, RAM Ratings has reaffirmed the AA1/Stable/P1 corporate credit ratings which mainly reflected the ratings house’s view of Bintulu Port as a government-linked entity and the high likelihood of extraordinary support from both the federal and state governments. “Given that Bintulu Port operates as a natural deep-sea port functioning as a key import and export gateway as well as the nation’s only LNG export terminal, the group continues to enjoy a stable stream of income from port operations,” it highlighted in a statement.
In meeting the Sarawak Corridor of Renewable Energy’s agenda of developing and transforming Sarawak into a developed state by 2020, RAM said Bintulu Port will expand its capacity and take on the development of Samalaju Port.
The port will function as a logistical hub for the import of raw materials and the export of finished products from heavy and energy-intensive industries at Samalaju Industrial Park.
“In view of the current economic slowdown in Asia, we expect growth in LNG and non-LNG cargo throughput to remain flattish in 2017, as observed over the past two years,” it added.
“Additionally, heavy industries operating at Samalaju Industrial Park are vulnerable to global downturns.
“Nonetheless, this risk is partly mitigated by the more resilient demand for LNG given the long-term contracts entered into by Bintulu Port, albeit on a declining trend, which allows the group to derive stable earnings.”
Meanwhile, RAM conservatively forecast slow growth in both LNG and non-LNG throughput, which coupled with funding for capex at Bintulu Port and Samalaju Industrial Port Sdn Bhd, could see Bintulu Port’s adjusted gearing and FFODC deteriorate to an average of 1.89 times and 0.19 times, respectively, over the next five years.
“Notably, the Bintulu Port Privatisation Agreement is co-terminous with Bintulu Port’s operating licence, which is due to expire on Dec 31, 2022. The agreement gives Bintulu Port the option to extend the tenure of the port’s operations for about 30 years, at the discretion of the Bintulu Port Authority.
“The risk of non-renewal of the port’s operating licence is minimal, given that the Prime Minister’s Department has already extended its approval in principle in October 2014 for the consideration of a renewal.”
Source: Hellenic Shipping News