S'pore port operator's net profit declines
S'pore port operator's net profit declines
Agence France-Presse, Singapore
PSA Corp. of Singapore, the world's largest container terminal
operator, said that its net profit for 2002 dipped as it slashed
rates due to competition and provided for losses from a Mid-East
joint venture.
Its net profit for the year to December fell 23.5 percent to
S$559.9 million (US$325.52 million) compared with the previous
year's S$732.2 million.
Total turnover rose 29.5 percent to S$2.96 billion due to
contributions from its Belgian subsidiary Hesse-Noord Natie (HNN)
and a joint venture port project in Guangzhou, China.
PSA chairman Stephen Lee attributed the losses to lower
revenues from its Singapore operations resulting from one-off
discounts as it fought to retain customers and a loss provision
for a port venture in the Yemen.
"We signaled our resolve to compete with one-off rebates to
customers... and we provided for impairment loss at a port
venture in the Middle East due to the difficult and uncertain
operating environment there," Lee said in a statement.
"These measures impacted our bottom line in 2002," he said on
Friday.
PSA's core container terminal operations handled a total 24.5
million 20-foot equivalent units (TEUs) in 2002.
Its flagship operations in Singapore handled 16.8 million
TEUs, up eight percent from last year, while volumes at overseas
terminals soared 116 percent to 7.8 million TEUs.
But rising competition, particularly from the neighboring Port
of Tanjung Pelepas in Malaysia -- which has snared two of PSA's
biggest clients in recent years -- has forced the company to trim
down and restructure.
In February, it laid off 800 of its 6,000 employees, or 13
percent of its work force, to reduce costs.
It also divested its non-core businesses and reorganized the
company to focus on its core competence and respond more rapidly
to competition.
Global credit rating agency Standard and Poor's said on Friday
that PSA's net loss was within expectations and would not affect
its AAA rating.
While PSA had become a net debtor when it used internal
resources to fund its 80 percent stake in HNN, "its financial
profile remains very strong," S and P said.
"Credit measures should remain strong, given various measures
undertaken during the first quarter of 2003 to improve
profitability, such as reducing staff numbers and divesting its
lower-margin non-core assets," it said.
S and P said it also believed Singapore's government had "a
strong interest in ensuring the financial health and viability of
the company, given the strategic importance of its assets."