PSA's 2018 profit dips 2.3% to S$1.2b on higher depreciation, finance costs

Singapore

PORT and terminal operator PSA International's net profit dipped 2.3 per cent to S$1.2 billion in 2018, owing to higher depreciation and finance costs.

PSA, one of the world's largest container operators, saw revenue for the year ended December 2018 jump 3 per cent to S$4.09 billion.

Despite slower global container trade growth amid looming trade wars and macro headwinds, PSA's container volumes clicked higher by 9.1 per cent as it handled 81 million twenty-foot equivalent units (TEUs) for the year.

Of that, the port operator's flagship terminals in Singapore contributed 36.31 million TEUs, up 8.9 per cent from 2017, while container volumes at its terminals outside Singapore rose 9.3 per cent.

PSA's balance sheet remains strong with a gross debt equity ratio of 0.48 times at the close of 2018.

"PSA concluded 2018 on a firm footing, notwithstanding slower global container trade growth," said PSA group chief executive Tan Chong Meng in the results statement, adding that several PSA terminals saw record container volumes.

Group chairman Fock Siew Wah described 2018 as a year of "constant change, beset by the headwinds of global economic and geopolitical uncertainty, escalating trade wars, and persistent operational challenges in the shipping industry due to overcapacity, low freight rates and rising fuel costs".

"As we head into 2019, the outlook remains challenging as the weakening world economy and prevailing protectionist sentiments will likely exact their toll on global trade," said Mr Fock, adding that nonetheless, PSA will continue to invest in port and related facilities, expand its operational and digital capabilities as well as improve its supply chain efficiency.

Earlier this week, PSA said that it inked a pact with two funds to jointly take over Poland's largest container terminal, marking its first investment in Eastern Europe.

The Polish hub, Deepwater Container Terminal (DCT) Gdansk, is the fastest-growing container port in Europe and among the 15 largest container ports on the continent; last year, its container volumes hit 1.9 million TEUs.