Port of Salalah posted a 19 per cent drop in net profit for the first half of 2014, mainly due to lower container terminal (CT) volumes and the inflationary impact on costs.
Consolidated net profit came in at RO3.18mn for the six-month period ended June 30, 2014, against RO3.91mn in the corresponding period last year, while revenue, at RO28.22mn, declined three per cent over the same period, Salalah Port Services Co said in a filing with the Muscat Securities Market.
“Port of Salalah continues to achieve considerable volume growth at the general cargo terminal (GCT), which reflects the role of the port in supporting local businesses expansion and growth. However, transshipment volumes at the container terminal (CT) have declined as compared to the corresponding period last year,” said Ahmed al Mahrizi, chairman of Salalah Port Service Co in the directors' report.
During the first half, the CT handled 1.63mn TEUs (twenty-foot equivalent units), a seven per cent decline from the year-ago throughput of 1.75mn TEUs.
Mahrizi said the decline in container activity was due to lower volumes from some of the existing liner customers, in addition to a delay in new businesses materialising. “The port commercial teams continue to endeavour growing volumes from existing customers and attract routes through Salalah to a number of new destinations.”
On the other hand, the port's GCT handled 5.46mn tonnes of general cargo during the first half, an overall volume increase of 28 per cent over the first half of 2013. The major commodities of trade include limestone, gypsum, methanol and cement exported from Salalah to nearby markets.
“The increase in export volumes of our major customers is a reflection of the role that the port plays in helping local businesses connect to global markets,” Mahrizi said. He added that the company is working in partnership with Salalah Free Zone to attract investment.
He noted that there is continued concern with slow progress on the development of industrial activity in Salalah, which has an impact on local trade volumes and on shipping lines calling at Salalah.
“One of the strategic aims of Port of Salalah is to encourage companies to add value to imported bulk and break-bulk products to generate additional re-export business for the CT and the GCT. The port recently handled higher exports of gypsum and limestone due to enhanced mining activities in the region. We therefore expect a positive future for the GCT and look forward to the completion of the expansion of the new dry bulk and liquid jetty towards the end of the year,” Mahrizi said.
He added that stable volumes are expected to continue at the CT. “Salalah is competing in a global economy and shipping is a highly competitive industry. Competition is growing in the region with new port capacities emerging. Profitability, capacity and market share are the fundamentals which the company continuously manages between risk and opportunity,” added Mahrizi.© Copyright - Muscat Daily