The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A 59,000 ton increase in bulk aggregate imports, combined with a $109,000 year-over-year expenses decline, enabled the Arawak Cay port’s operator to beat profit targets by nine percent.

Michael Maura, chief executive of Arawak Port Development Company (APD), told Tribune Business that net income for the three months to end-September 2018 was two percent higher than prior year comparatives despite falls in container and vehicle import volumes.

It also beat APD’s internal first quarter budget projections by $178,819 or nine percent, although this came largely from a $332,000 expenses cut that pushed costs six percent under estimates.

“The unaudited net income for the 2019 first quarter was $2.091m, or two percent higher than the same period the prior year,” Mr Maura confirmed. “Total revenues for the 2019 first quarter were $7.751m or $85,922 under the 2018 first quarter, which was largely attributable to a decline in storage revenue related to the Baha Mar project.

“Total operating expenses for the 2019 first quarter were $4.362m or $108,549 less than the 2018 first quarter. Twenty-foot equivalent (TEU) volumes were one percent or 131 over the same period of the 2018 first quarter.

“Bulk ton volumes were 59,425 tons more during the 2019 first quarter than the same period in 2018. Finance and depreciation expenses were $1.298m or $26,061 under the 2018 first quarter.”

Turning to APD’s performance against its own internal forecasts, Mr Maura added: “First quarter 2019 actual unaudited net income was $178,819 or 9 percent over budget due to a reduction in operating, depreciation and financing expenses of approximately $332,000 or close to 6 percent under budget.

“Revenues for the 2019 first quarter were under-budget by $153,037, and were mainly attributable to a decline in storage revenue, reefer fees and stevedoring fees.

“TEU volumes for the 2019 first quarter were under-budget by 112 TEUs or 1 percent. The bulk terminal volumes, however, were over-budget by approximately 23,000 tons, while vehicle imports were under-budget by 365 vehicles or 9 percent.”

The APD chief then confirmed: “The increase in unaudited net income versus budget and prior year was principally driven by reductions in expenses and an increase in bulk aggregate imports.

“TEU volumes remain relatively flat and we do not anticipate any change to this trend for the remainder of the year. We do not expect bulk aggregate imports continuing to beat budget, but we forecast vehicle import volumes to return to budgeted levels.”

APD’s improved first quarter performance comes after executives adopted a “conservative” approach to budgeting and financial forecasting for the current 2019 financial year, citing numerous potential local and international headwinds to economic activity that could impact import volumes.

Besides the value-added tax (VAT) increase “curbing consumer spending for the foreseeable future”, the port operator said in its 2018 annual report that other development/construction projects were unlikely to fully replace the import activity associated with the rush to complete Baha Mar’s construction and full opening.

“For the 2019 fiscal year, we are budgeting gross revenue of $30.996m (2018 actual: $31.532m) or two percent less than the prior year’s actual gross revenue,” APD said of the 12 months to end-June next year. “Net income is projected to be $7.41m or $1.195m less than the 2018 actual net income of $8.605m.