LONDON: Global Ports Investments PLC on Tuesday said profit plummeted in the first half of 2017 mainly due to a much-smaller foreign exchange gain, lower revenue, tighter margins, and higher costs, while it is continuing to favour paying down debt over dividends. The company, a leading container and oil products terminal operator servicing Russia’s cargo flows, said pretax profit in the first six months of the year was just USD3.0 million, a steep decline from the USD152.9 million profit reported a year earlier. The decline was caused by a combination of lower revenue of USD162.5 million compared to USD163.7 million the year before, tighter margins causing gross profit to decline to USD82.5 million from USD108.7 million, higher administrative and financial costs, increased losses from joint ventures and wider miscellaneous losses. The major difference, however, was the gain on foreign exchange in the first half of USD15.1 million, significantly lower than the USD106.9 million gain a year ago. The total net finance costs of USD11.0 million also represented a big change compared to the USD92.6 million of net finance income the year before.
Global Ports said revenue declined due to a 7.1% decrease in container revenue that was largely offset by the 31% growth in non-container revenue. No dividend was declared as the company continues to deleverage, ending June with net debt of USD915.0 million, reducing it from USD947.3 million at the end of 2016. Free cashflow was strong at USD70.3 million in the period, but still 23% lower than the year before. “We have seen good recovery and improved capacity utilisation in the industry during the first half of 2017 which is driving accelerated container volume growth in our terminals. At the same time, we maintained our focus on developing additional revenue streams from other cargoes. By capitalising on this opportunistic growth in non-container revenue, Global Ports was able to largely compensate for the decline in container revenue in the period,” said Chief Executive Mikhail Loganov. “With the current market backdrop showing signs of improvement, we are confident that Global Ports’ well invested assets, operational skills and high-quality service will ensure that we are well positioned to capitalise on any ongoing market recovery,” he added. Global Ports was untraded on Tuesday, having last traded at USD1.40.
