PSA's full-year profit jumps 5.1% to $1.23b

Pasir Panjang container terminal. PSA handled 74.24 million TEUs of cargo in the 2017 financial year, up 9.8 per cent from 2016.
Pasir Panjang container terminal. PSA handled 74.24 million TEUs of cargo in the 2017 financial year, up 9.8 per cent from 2016.ST PHOTO: KUA CHEE SIONG

Earnings driven higher by higher revenue, container throughput

Port and terminal operator PSA International posted a 5.1 per cent jump in full-year net profit to $1.23 billion on higher revenue and container throughput at its terminals worldwide.

Revenue for the year ended Dec 31 last year was 7.8 per cent higher at $3.97 billion.

The port and terminal operator handled 74.24 million TEUs (20-foot-equivalent-units) of cargo during the 2017 financial year, up 9.8 per cent from 2016.

PSA's flagship Singapore terminals contributed almost half of this volume or 33.35 million TEUs (20-foot-equivalent-units), a 9 per cent increase compared to the year before. PSA terminals outside Singapore accounted for 40.89 million TEUs of throughput, 10.4 per cent higher over 2016.

PSA International group chief executive Tan Chong Meng said global container throughput last year had its "strongest showing" since 2011, helped by stronger economic growth in many countries.

"The frenzied container line shipping consolidation in 2016, which percolated into service deployment changes in 2017, also contributed towards PSA's group throughput for the year," he said.

PSA's Singapore terminals benefited from the diversion of CMA CGM's cargo volumes from Port Klang after the French shipping giant completed the acquisition of Neptune Orient Lines.

Its terminals worldwide also benefited from another mega trend of shipping lines joining forces by forming vessel-sharing alliances.

Group chairman Fock Siew Wah noted that such alliances have chosen to "hub their shipping services in many PSA terminals".

He also said PSA's growth trajectory had withstood threats from the macro-environment, including some "chaotic" operating conditions caused by malicious large-scale cyber attacks on various entities last year.

Danish giant AP Moller-Maersk, was one of these. Last June, the conglomerate acknowledged on Twitter that it was one of the victims of the global cyber attack from the Petya ransomware. Outages at its computer systems across the world affected its shipping line and other businesses.

The attack raised the urgency for international shipping and operators of ports and terminals to work hand-in-hand to digitise worldwide and enhance cyber security.

Acknowledging the digital wave and an "increasing quest for cargo flow visibility", Mr Tan said PSA, with its vast operating footprint at key nodes of global trade and supply chains, is in a good position to work with customers and partners to create new solutions that exploit opportunities from digitalisation.

A version of this article appeared in the print edition of The Straits Times on March 20, 2018, with the headline 'PSA's full-year profit jumps 5.1% to $1.23b'. Print Edition | Subscribe