PSA posts drop in 2014 profit due to higher costs; cites challenging environment

SINGAPORE - PSA International (PSA) was hit by a 1.7 per cent year-on-year drop in net profit last year to $1.4 billion, as higher operating cash costs and depreciation offset a 2.9 per cent growth in revenue to $3.8 billion.

Announcing its 2014 results on March 12, the port operator - with operations in Asia, Europe and the Americas - said it handled a record throughput of 65.4 million standard container units (TEU), which grew 5.8 per cent from 2013.

"Notwithstanding the overall sluggish global economic and trade growth, PSA's group wide performance held its ground in terms of throughput, revenue and net profit," PSA chairman Fock Siew Wah said.

But chief executive Tan Chong Meng noted that the port and shipping industries are in a rough patch.

"The industry awoke to harsh new realities, mismatch of mega vessels and ports, more complex alliance arrangements, reduced shipping reliability, port congestion," he said. "As more mega vessels enter service and the workings of the mega alliances go into full swing in 2015, we may continue to see operational challenges this year."

Against that backdrop, PSA's flagship terminals in Singapore still managed to grew their throughput by 4.1 per cent to 33.55 million TEUs.PSA terminals outside of Singapore contributed another 31.89 million TEUs, up 7.8 per cent.

But this will again put Singapore behind Shanghai ports' 35.3 million TEUs reported for 2014, as the Chinese port became the world's busiest for the fifth consecutive year. Singapore has trailed Shanghai since 2010 in the competition to become the region's leading maritime hub.