Monday, February 19, 2018
By NEIL HARTNELL
Tribune Business Editor
THE Nassau Container Port's (NCP) operator is "amazed" at auto import volumes that are 29 per cent above forecast, as it unveiled half-year profits slightly ahead of expectations.
Michael Maura, Arawak Port Development Company's (APD) chief executive, told Tribune Business that the extra vehicle imports combined with the increase in port landing and security fees, plus storage and terminal handling outperformance, to produce total comprehensive income that was 4.4 per cent ahead of internal estimates.
The BISX-listed port operator said the improved 'bottom line' for the six months to end-December 2017, which stood at $4.359 million compared to forecasts of $4.174 million, was achieved despite container (twenty-foot equivalent unit) throughput volumes being 1.5 per cent below target.
Mr Maura added that while APD's second half had got off to a sluggish start, with TEU import volumes down almost 20 per cent year-over-year, these were expected to recover as government and private sector investment projects progressed.
Explaining why APD outperformed forecasts for the 2018 first half, Mr Maura told this newspaper via e-mail that revenues exceeded projections by 1.7 per cent, coming in at $16.144 million as opposed to $15.879 million.
"APD had budgeted 7,500 imported vehicles, but actual imported vehicles were 9,654 or 29 per cent over budget. We remain amazed at the number of vehicles imported," the Port chief said.
"Four significant factors contributing to the increase in revenue were: The present tariff rate on vehicles is $190, so the additional 2,154 vehicles produced additional revenue of $490,260. On September 30, the port landing fee increased by $2 per imported loaded 20-foot container, and port security surcharge increased by $3 per loaded 20ft container (TEU).
"Port Storage was also $364,000 over budget which, too, helped. This increase in storage was primarily due to shipping companies leaving their empty containers in Nassau longer than they did prior year. The port's terminal handling was up due to an increase in container volumes handled by the common terminal, and stevedoring was over plan due to an increase in out-of-gauge and project cargo."
Mr Maura added that stevedoring and terminal handling fees had also beaten projections as a result of carriers using Arawak Cay arriving "outside of regular operating hours".
"APD also enjoyed an increase in revenues from refrigerated containers attributable to Baha Mar operations," he said. "Dry bulk aggregate volumes are off due to a sluggish construction sector."
Container throughput volumes were down 1.5 per cent against budget for the first half, standing at 33,815 containers compared to the 34,303 projected. While the pace of this decline accelerated last month, Mr Maura said there was every indication the trend would be reversed.
"January 2018 import TEU volumes are under January 2017 by 921 TEUs or approximately 20 per cent," he revealed to Tribune Business. "We, however, expect import TEU volumes to increase in the coming months as both the private and Government sector advance projects."
Mr Maura added that while employee salary, benefits and training costs for the first half were $225,000 higher than in the prior year, there were $35,000 below projections.
"The increase over prior year is in part due to the following," he explained. In 2016, APD saw import volumes for the period July through December 2016 of 31,344 or 8 per cent under current period. During this period, APD personnel head count was approximately seven less.
"Over the first half of this fiscal year, APD has increased its headcount to account for the increase in volumes and to address business needs. Additionally, there has been an increase in APD personnel joining the company pension and health programmes, which has increased the company's expenses over prior year."