The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Arawak Cay port operator yesterday said a 3,124 year-over-year increase in container volumes resulted in its half-year profits more than doubling, as Hurricane Matthew repairs and Baha Mar’s re-start resulted in import activity surging.

Michael Maura, Arawak Port Development Company’s (APD) chief executive, told Tribune Business that the increase in container throughput volume had driven increases in all its major revenue lines.

The BISX-listed Nassau Container Port operator was also boosted by the recovery of $1.5 million in Baha Mar-related rents and storage income, and a 10 per cent increase in vehicle imports for the six months to end-December 2016.

Mr Maura added that tonnage shipped through APD’s break bulk terminal had also more than doubled year-over-year, as Bahamas residents headed to Florida to purchase their storm relief supplies.

“Our container volumes are 3,124 over last year for the same period, and 2,829 over budget,” he told Tribune Business, identifying the main factor driving APD’s substantial bottom line improvement.

Mr Maura said the comparisons against budget were especially impressive because APD had budgeted for a flat 2017 when it came to container volumes, due to uncertainty over when Baha Mar construction would resume.

The APD chief executive added that the company’s budgeting and financial planning had also not taken into account Hurricane Matthew, and the import increase sparked by the reconstruction and repair efforts.

“The increase in container volumes was attributable to Hurricane Matthew rebuilding efforts, and to a lesser extent Baha Mar and some Hurricane Joaquin-related imports,” Mr Maura told Tribune Business.

“The increase in volumes had a substantial impact on operating income. We were also fortunate to collect approximately $1.5 million in Baha Mar-related outstanding rents and port storage income.

“We also implemented a tariff increase on August 1, 2016, amounting to $12 per TEU, which would have added to both the revenue and income increase. We have also seen an increase in vehicle imports. December 2015 year-to-date saw 6,580 vehicle imports versus December 2016 year-to-date of 7,334 vehicles, or a 10 per cent increase.”

Mr Maura said the substantial increase in import activity was also reflected at APD’s ‘break bulk’ terminal, where “tonnage through the end of December was 13,700 tonnes compared to 6,500 tonnes for the same period in the prior year”.

Explaining the factors driving the more than 100 per cent increase, he added: “That was very much attributable to Hurricane Matthew volumes.

“It would have been the small, less-than-container load imports from persons flying over to Florida to do their shopping, picking up supplies and home repair materials, and shipping them over to Nassau on the likes of the Betty K.

“The reality is that the hurricane resulted in an increase in retail, construction and employment activity.”

Mr Maura said that while increased import volumes from Hurricane Matthew had continued into 2017, “as insurance monies flow into the economy”, this impact was likely to lessen.

He added, though, that this momentum would be replaced by Baha Mar-related imports, as the multi-billion dollar Cable Beach development moved to both complete construction and outfit the property with traditional hotel materials and supplies.

APD’s twenty-foot equivalent unit (TEU) volumes were up 35.9 per cent year-over-year for January 2017, standing at 5,617 compared to 4,132 for the same month in January 2016.

This continued the surge that started in November and December, when TEU volumes were up 25.8 per cent and 23.4 per cent year-over-year, standing at 6,756 and 6,552 TEUs.

The Government’s revenues also rebounded post-Matthew, as its collected $53.402 million in combined Customs duties, Excise Tax and Value-Added Tax (VAT) through the Arawak Cay port.

This total represented a five-month high, and a rebound from the 30 per cent drop to $32.791 million in October 2016 as a result of Matthew’s aftermath.

All this has placed APD well ahead of its own internal forecasts that it would generate a 16.26 per cent increase in shareholder profits for its 2017 financial year.

It projected in its 2016 annual report that total income attributable to equity investors will increase by more than $700,000 to $5.044 million for the 12 months to end-June 2017 - a target that it is only $200,000 shy of following the first half.

APD unveiled total comprehensive income that was more than double the 2015 comparatives, producing a $4.814 million bottom line for the six months to December 2016, as opposed to just $2.192 million the prior year.

Revenues rose by 10.1 per cent to $14.943 million, compared to $13.571 million the prior year, while expenses dropped by 14.7 per cent - from $8.641 million to $7.379 million.

The expenses decline was aided by a $700,168 bad debt recovery, which Mr Maura confirmed was related to Baha Mar rents and storage money previously owed.

On the balance sheet side, APD saw its accounts receivables jump to $4.014 million from $1.95 million the previous year.

“The increase in import activity resulted in an increase in accounts receivables,” Mr Maura explained. “We also had a couple of accounts that fell behind but we have experienced an improvement.”

He added that while the impact from Baha Mar imports was uncertain, these were expected to keep APD tracking “over budget” for the remainder of its 2017 financial year.

“We have continued to work closely with Bahamas Customs and the Ministry of Finance in their efforts to address illegal trade activity,” Mr Maura added.

“We have provided facilities and personnel to support the various initiatives. As an example, the Nassau Container Port now has a Customs K9 department operating at the port.”