The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Nassau Container Port’s (NCP) operator has beaten its first quarter profit target by 23 percent despite forecasting that full-year net income will be $763,155 less than it achieved in 2019.

Arawak Port Development Company (APD), unveiling its 2019 annual report, said its bottom line for the three months to end-September 2019 was $398,510 ahead of internal forecasts despite projecting that full-year profits will be down 9.5 percent year-over-year.

The BISX-listed operator of New Providence’s main commercial shipping port, through which almost all cargos must pass, said that it remained both “conservative and optimistic” and did not see any “significant” increase in volumes passing across its bulkhead despite the presence of investments at Hurricane Hole, GoldWynn and The Pointe, along with Atlantis’s upgrades and expansion at Albany.

“For the 2020 fiscal year we are budgeting gross revenue of $30.158m or two percent less than the prior year’s actual gross revenue [of $30.913m],” APD revealed. “Net income is projected to be $7.267m or $763,155 less than the 2019 actual net income of $8.030m. Our net income is currently 23 percent or $398,510 over budget as at September 30, 2019.”

The forecast declines in both APD’s top and bottom lines comes despite expectations that container throughput volumes at Arawak Cay will increase by 3,000 or a modest 2.3 percent to 133,000 twenty-foot-equivalent units (TEUs) for the 12 months to end-June 2020.

“Our total revenues as at September 30, 2019, are over budget by approximately $593,527 or eight percent,” the port operator added. “Nassau Container Port’s TEU volumes as at September 30, 2019 are tracking 4 percent over budget. Total expenses as at September 30, 2019 were over budget by $156,987.

“Operating expenses, including depreciation and amortisation of $20.92m for the period ended June 30, 2019 were $574,328 or 3 percent lower than our 2019 budgeted operating expenses of $21.485m.”

APD’s projections come after it exceeded its 2019 full-year profit target by 9 percent or $634,355, coming in at $8.03m compared to the forecast $7.396m. The former was some 7 percent lower than 2018 figures due to the fall-off in container import volumes as Baha Mar’s construction ceased, together with a decline in storage and reefer fees.

“For the year ended June 30, 2019, NCP had processed 131,734 in-bound/outbound TEUs,” APD’s annual report revealed. “This represents a 1 percent decline in container volumes under 2018 volumes of 132,692 TEUs.

“Our direct operating margin (DOM) for 2019 was 42 percent (2018: 44 percent). Our budgeted direct operating margin for 2019 was 42 percent. For the period ended September 30, 2019, our direct operating margin is 43 percent which is 3 percent more than our budgeted direct operating margin for the same period.

“Actual TEU volumes for 2019 of 131,734 were over-budget by 1,734 TEUs or 1 percent compared to our budgeted 2019 volumes of 130,000 TEUs. Additionally, bulk car volumes of 14,138 were 2,862 or 17 percent less than 2019 budgeted car volumes of 17,000. This resulted in revenues of approximately $3.003m from landing and security fees for vehicles.”

The annual report continued: “Additionally, revenues from storage fees were approximately $137,172 under budget during financial year 2019. Reefer revenue was under budget by $139,100 during financial year 2019. Total current assets decreased from $23.558m to $20.692m or a decrease of 12 percent.

Cash and cash equivalents decreased by $2.964m. During the year the spare inventory increased by $7,893. Gross accounts receivable decreased by $76,657 during financial year 2019. Property plant and equipment of $82.801m as at June 30, 2019, represents port development costs inclusive of works in progress related to the BPL substation and other capital projects. 

“Current liabilities decreased by $4.925m from $10.169m to $5.244m. This was largely driven by the current portion of the long-term debt principal which became due at the end of financial year 2019.”