The Tribune

• APD makes up 20% pts on vehicle imports in May

• Top executive ‘can sense’ revival in last six weeks

• Eyes pre-COVID return by early 2022; profits off 37%

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Nassau’s sole cargo port yesterday voiced optimism it has “started to shrink the gap” to pre-COVID business volumes with vehicle imports making up 20 percentage points during May alone.

Dion Bethell, Arawak Port Development Company’s (APD) president and chief financial officer, told Tribune Business it “can sense within the past four to six weeks” that shipping business has picked up in line with the tourism industry’s post-COVID re-opening and that of the wider economy.

Speaking after the BISX-listed operator of Nassau Container Port posted a 37 percent profits decline for the nine months to end-March 2021, Mr Bethell said vehicle imports for that period had been down 50 percent year-over-year. However, following a spike in auto arrivals that began at the end of April, this category was now down only 30 percent against prior year comparatives.

APD’s performance is a good benchmark against which to measure that of the wider Bahamian economy, given that 90 percent of all imports to New Providence cross its bulkheads, and Mr Bethell said it was on target to return to pre-COVID shipping volumes by 2022’s first calendar quarter if present trends hold.

“At the end of April, for the month of May, we saw an increase in the amount of vehicles that are now being imported,” he disclosed. “That, for us, is one indicator things are starting to improve compared to what it was. We’ve seen quite a few vehicles coming in, but not at pre-COVID volumes.

“When you look year-over-year we were down 50 percent for the nine months to March, and are now down by 30 percent. That gap is starting to shrink. Year-over-year, we were also down about 20 percent on twenty foot equivalent unit (TEU) container volumes and relatively flat on tonnage.

“It’s still uncertain when conditions will reach to pre-COVID levels, but the volumes are starting to pick back up. In terms of the volumes that the shipping carriers are bringing in, over the last four to six weeks we can sense that there is some increase,” Mr Bethell continued.

“I would presume a good much is related to the hotels and the Government with their initiatives to drive the tourism machine. The wholesalers like Bahamas Food Services and others are starting to bring in additional volumes to supply the major hotel properties like Atlantis and Baha Mar.”

APD’s import volume data shows just how much Bahamian economic activity dried up during April/May and late summer/fall last year, which coincided with the peak of COVID lockdowns and associated public health restrictions. For example, TEU import volumes fell by almost 38 percent year-over-year in April 2020, as the number of imported containers dropped by more than 2,000 - from 5,815 in 2019 to 3,620.

Fast forward to early 2021, and the Nassau Container Port’s monthly TEU volumes have been down by between 900-1,000 year-over-year for each of the three months in the calendar year’s first quarter. However, January and February were up against pre-COVID comparisons, while March 2020 was only partially affected by pandemic-related lockdowns.

Thus APD’s April 2021 figures provide a better indication of where Bahamian aggregate demand stands, both compared to COVID lockdown and pre-COVID figures, based on TEU container volumes. While April was 37.3 percent up on the prior year at 4,972 containers, it was still 14.5 percent down compared to the same month in 2019.

“We’re confident it’s starting to pick up,” Mr Bethell told this newspaper of import activity. “It’s not trending down, it’s holding, and we don’t foresee it trending lower than it is now. We’re positive that the cruise home porting initiative, that that will be a big game changer and hopefully what drives and starts to give the tourists some confidence to travel.

“The volumes that are starting to pick up, the activity, we feel that’s indicative of what we sense around town; that things are starting to look more positive, certainly compared to this time last year. When you look at our [COVID infection] numbers it’s concerning because we are consistently seeing numbers that are up there, but we appreciate that the Government is very committed to turning the economy around.”

Mr Bethell said that if the Bahamian economy continues to re-open and maintain its present momentum, and the Government’s recently-announced Budget measures take effect, “these things will lend favourably to a recovery by the end of this year; the fourth quarter going into the first quarter of next year” for APD’s import volumes.

When measured against APD’s own internal forecasts, he added that TEU volumes were “relatively flat” while vehicle volumes “are still down by one-third”. However, “on the bulk aggregate side that number is up by about 20 percent over budget, and that is driven primarily by the project cargo that comes in and tonnage in non-containerised cargo”.

Such cargo, Mr Bethell explained, typically included heavy equipment and materials such as sheet piles that are being used for the Nassau Cruise Port’s $250m transformation project. “That has picked up,” he added, “but it’s still performing under prior year comparatives.”

The APD chief said no decision had been taken by the company’s Board about the payment of shareholder dividends this year, with the last capital return having occurred in December. He added that the company remained “very prudent” in managing its expenses amid COVID-19’s ongoing economic fall-out.

APD’s net income for the first nine months of its 2021 financial year, which closes at end-June, fell by more than one-third year-over-year from $7.905m pre-COVID to $4.984m - a drop of close to $3m. This was driven largely by a 17.7 percent revenue drop-off, as income fell from $25.517m to $20.988m. Total expenses dropped by 17.3 percent, shrinking from $12.262m to $10.14m.