Post on 24-Jun-2020
Westports Holdings Berhad
Corporate Presentation4th Quarter 2017 Financial Results
Corporate Overview
2
Revenue Track Record (RM million)Company Snapshot
Commencement
& concession
• 1 August 1994• Concession runs through to 2054
Nature of
businessPort development and management of port
operations
Port location Port Klang, Malaysia
Port overview
& capacity
• 31 berths • Total quay length measuring 8.4 km
• Container terminal facilities with
contiguous linear berth of 5.8 km• Container capacity 14.0m TEUs per year
Achievements • The 2nd busiest port in South East Asia,
ranked by volume of containers handled• Ability to support the world’s largest
container vessels of 19,000 TEUs• Productivity record of 793 moves per hour
(mph) with deployment of 9 Quay Cranes
on CSCL Le Harve in 2014• For the year 2017
• Market leader in Malaysia with 38% of
market share for containers handled • Container throughput handled of 9.02m
TEUs• Achieved operational revenue of RM1.7
billion
Container Conventional Marine Rental
Terminal
handling
services
Value-added
services
• Storage
• Reefer
• Special
• Removal
• Container
freight
• Other
services
• Dry bulk
• Liquid bulk
• Break bulk
• Roll-on roll-
off services
(RORO)
• Cement
• Tug boat
• Pilotage
Rental of land,
storage
facilities and
office space
• Generally
used by
larger
conventional
cargo
customers
• On-dock
depot
services
Contribution To Operational Revenue In 2017
85% 8% 5% 2%
1,115 1,226 1,348 1,503 1,578 1,804 1,716
1,387 1,4921,712
1,562 1,682
2,035 2,089
2011 2012 2013 2014 2015 2016 2017
Operational Construction Total
Shipping Lane Density Major Population Centres Strategic Location Of Westports
• Port Klang is located ~12 nautical miles from the
Straits of Malacca shipping lane
• Westports is strategically situated on 535.47 ha land
fronting Straits of Malacca
• At least 80,000 vessels sail through the Straits of
Malacca annually
• Port Klang has grown to be the 12th busiest port
globally and 2nd busiest in Southeast Asia
• Global and regional connectivity makes Westports
an attractive transhipment hub. Established
connections to more than 350 ports around the world
• Port Klang is the gateway for Import/Export cargo for
the immediate hinterland of the Klang Valley (which
includes both Kuala Lumpur and Putrajaya)
• Klang Valley is the heartland of Malaysia’s industry
and commerce. Also has approximately 34% of
Malaysia’s total population
• Numerous intermodal connections within
Peninsular Malaysia and with neighbouring countries
have contributed to Westports’ positioning as a
preferred gateway for Import/Export cargo
Strategic Location For Transhipment & Gateway Traffic
3
Primary Hinterland
Secondary Hinterland
PTP
PSA
Published Tariff On 20’ Container For Transhipment
Port
Klang
Port Of
Tanjung Pelepas
PSA
Singapore
RM 161
(USD41)
RM 200
(USD51)
SGD 115
(USD87)
source : bioval.jrc.ec.europa.eu source : geology.com source : wikimedia.org
Westports
High Asset Productivity
4
World-Class Productivity
2123
2426
2830
31
35
1998 2000 2002 2004 2006 2008 2010 2012onwards
World Record For Container Productivity
Year VesselRecord
(mph)
Crane
Deployment
2014 CSCL Le Harve 793 9
2011 CSCL Pusan 734 9
2009 CMA CGM Orfeo 665 9
2006 CMA CGM Rossinni 421 7
2006 CMA CGM Puccini 452 8
2006 CMA CGM Bizet 456 8
Container Terminal Utilisation
Crane Moves Per Hour (mph)
70-100 mph per vessel on main line vessels
50 mph per vessel on feeder vessels
Welcoming Bigger Container Vessels
2,900
6,600
8,400
14,100
16,000
19,000
1996 1999 2006 2011 2012 2014
Size Of Container Vessels That Can Be Accommodated By TEUs
Water depth of 17.5 meters can
accommodate the world’s largest
vessels. 19,100 TEU MV CSCL
Globe and similarly-sized vessels
call at Westports
76% 77% 79% 76% 82% 87%
69%
2011 2012 2013 2014 2015 2016 2017
Approximate effective average utilisation *
*
*
Milestones & Achievements
5
Westports Container Volume Evolution (million TEUs)
Westports Market Share Of Container Volume
Strong government support
Key customers
Productivity Snapshots
Year 1996 End-2017
Deepest Draft 15.0 metres 17.5 metres
Container Berths 600 metres 5.8 kilometres
Quay Cranes 9 units 67 units
Crane Productivity 35 mph per crane
for larger vessels
(size over 300m)
Handling Capacity 1.0m TEUs 14.0m TEUs
Established Relationships
0.0 0.10.5
0.8 1.01.5
2.0 2.3 2.62.9
3.74.3
5.04.5
5.66.4
6.97.5
8.49.1
9.9
9.0
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Gateway Transhipment Total
Container throughput has grown
every year since inception except
in 2009 when the Global Financial
Crisis affected global trade. M&As
involving our key clients and also
alliance changes affected 2017’s
volume
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
% of Port Klang % of Malaysia
% of Straits of Malacca % of Southeast Asia
In the year 2017
75% of Port Klang
38% of Malaysia
16% of Straits of Malacca
9% of Southeast Asia
Visionary Leadership & Corporate Culture
Tan Sri Datuk G. Gnanalingam
Successfully secured the concession
and started Westports in 1994
Chartered Institute of Logistics and
Transport’s CILT Achiever of the
Year 2007 award
Life Time Achievement in Port /
Terminal Industry award by Global
Ports Forum in 2017
Value Creator : Malaysia’s
Outstanding CEO award by The
Edge Billion Ringgit Club in 2017
Hutchison Port Holdings Limited’s
representatives bring invaluable
expertise and relationships to guide
long-term strategic growth
6
Major Shareholders
Pembinaan Redzai Sdn Bhd, Semakin Ajaib Sdn Bhd 45.52%
South Port Investment Holdings Limited 23.55%
Board Of Directors
Tan Sri Datuk G. Gnanalingam • Non-Independent Executive Chairman
Datuk Ruben Emir Gnanalingam • Group Managing Director
Tan Sri Dato’ Nik Ibrahim Kamil Bin
Tan Sri Nik Ahmad Kamil
• Independent Non-Executive
• Chairman Nomination, Remuneration
And Corporate Governance
Committee
Dato’ Yusli Bin Mohamed Yusoff • Independent Non-Executive
• Chairman Audit And Risk
Management Committee
Ip Sing Chi • Non-Independent Non-Executive
Ruth Sin Ling Tsim • Non-Independent Non-Executive
Tan Sri Ismail Bin Adam • Independent Non-Executive
Chan Chu Wei • Non-Independent Non-Executive
Kim Young So • Independent Non-Executive
Chan Soo Chee • Independent Non-Executive
Shanthi A/P Kandiah • Independent Non-Executive
John Stephen Ashworth • Alternate Director To Ip Sing Chi &
Ruth Sin Ling Tsim
Corporate Culture
T Teamwork
A Accountability & Integrity
N Now Culture
S Safety Conscious
R Responsible
I Innovative
G Good Family Values
Delivering the
best-in-class level
of service is and will
always be our top
priority as we can
only grow when our
customers grow
faster than us
Comprehensive Port Infrastructure
7
Dry Bulk Terminal II Liquid Bulk Terminal Dry Bulk Terminal Break Bulk Terminal Container Terminals
Berths
Total of 31 berths with an
aggregate length of 8.4km
24 of the berths are contiguously
connected in a straight line with
total length of 5.8km. Maximum
usable quay length and flexibility
in vessels berthing
Natural deep harbour
Protected harbour. Natural
shelter eliminated the need for
artificial breakwaters
Southern approach into Port
Klang has a deeper channel than
northern approach – larger ships
have to enter Port Klang using
southern approach
PKA deepened entrance channel
to Westports from 17m to 18.5m
Deepest berth is now able to
handle the largest vessels in the
world
Terminal expansion designed to
handle container vessels that are
growing in TEU capacity
Easy access to 405-ha Port Klang
Free Zone
Integrated 405-ha customs-free
commercial and industrial zone
Terminal Expansion Led Growth
8
CT9 Wharf
Capacity Expansion m TEUs
0 5 10 15
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Track record of growing
capacity from 2m TEUs in 1996
to 14m TEUs by end-2017
Latest expansion at CT8 and
CT9 were completed at end-2017
Approval-in-Principle for CT10 to
CT19 expansion that would raise
capacity to 30m TEUs per annum
CT8 & CT9 Expansion
9
Current Construction Status At CT8 & CT9
Capital Expenditure By Components
RM million 2015 2016 2017 2018f Total
Construction 104 227 362 61 754
Equipment 117 224 417 39 797
CT8 & CT9 221 451 779 100 1,551
Maintenance 31 40 33 79 183
Total Capex^ 252 491 812 179 1,734
CT9 wharf and container yard zone Y is now completed
Container Terminal Expansion Plan
CT8 Facilities • 600 metres of wharf and container yard
• Back-of-the-terminal facilities: 2nd container gate,
marshaling centre and container freight station
• 14 units of Quay Cranes
• 15 units of Rubber Tyred Gantry Cranes
• Terminal tractors and trailers
Timeline • Commenced in January 2015
• Phase 1 completed 300-metre wharf. Operational since
May2016 with 4 new 52-metre high QCs
• Phase 2 additional 300 metres of wharf, CT8 container
yard and more TOEs. Wharf completed in Aug2017
Capacity • When all the facilities have been completed & terminal
handling equipment is delivered, total capacity is
expected to increase to 13.5 million TEUs per annum
Capex • Total capex for CT8 of RM1.17 billion
• Capex in 2017 for Phase 2 development
• Funded mainly by internally generated funds and
short-term bank borrowings
CT9 Facilities • 600 metres of wharf
• 2 units of Quay Cranes
• 13 units of Rubber Tyred Gantry Cranes
• Terminal tractors and trailers
Timeline • Phase 1 was completed by Dec2017
Capex &
Capacity
• Wharf construction work and additional TOEs cost
RM559 million
• Total terminal handling capacity has now increased to
14.0 million TEUs per annum
^May not add up due to rounding
4Q17 Volume -13%. Gateway +15% while transhipment -23%
2017 Overall -9%. Gateway +10% as transhipment -16%. More
favourable gateway : transhipment ratio of 31 : 69
MFRS 15 will supersede MFRS 118 Revenue, MFRS 111
Construction Contracts and revenue related interpretations
issued by the Malaysian Accounting Standards Board
It is effective for financial periods beginning on or after
1st January 2018, with earlier application permitted
Measures taken towards compliance
Essentially, under MFRS 15, marketing cost included under the
Cost of Sales will have to net to revenue
From 1st January 2017, Westports reported container revenue
from a selected portfolio of contracts have been recognised on
a net basis
From 1st January 2018, Westports will now fully comply with
MFRS 15 by netting all marketing cost to revenue
Impact – neutral to the bottom line
Westports container revenue and container cost in 2017 have
both decline, this is partly attributable to marketing cost which
is now netted to revenue (for a selected portfolio of contracts)
when compared to the previous corresponding period
GP, PBT and PAT absolute numbers are not affected by the
steps taken towards compliance with MFRS 15
S.E.A. Container Hub
10
6.567.39
6.22
2.49
2.56
2.81
9.05
9.95
9.02
2015 2016 2017
Transhipment Gateway Total Throughput
-9%
^May not add up due to rounding
Total Container Throughput (million TEUs)MFRS 15 Revenue from Contracts with Customers
Throughput Volume
11
4Q17 Liquid bulk partly due to bunker volume re-classification.
Cement declined with lower construction activities and demand
2017 Dry bulk growth due to fertilizer and copper concentrate
4Q17 Asia-Australasia’s volume improved with new services
2017 Intra-Asia growth raised this trade lane to 57% from 48%
in 2016 while Asia-Africa reflected client’s services re-alignment
Trade Lane4Q17
TEU m
4Q17
%Chg
2017
TEU m
2017
%Chg
2017
%Split
Intra-Asia 1.34 6.5% 5.15 7.8% 57.1%
Asia-Europe 0.26 -61.7% 1.72 -32.1% 19.0%
Asia-Australasia 0.24 12.6% 0.87 6.4% 9.6%
Asia-America 0.19 5.8% 0.76 -3.8% 8.4%
Asia-Africa 0.07 -61.5% 0.31 -63.6% 3.5%
Others 0.12 206.7% 0.22 25.6% 2.4%
Total^ 2.22 -12.8% 9.02 -9.3% 100%
Conventional Throughput (million Metric Tonne)Container Throughput By Trade Lanes
Cargo2016
m MT
4Q17
m MT
4Q17
%Chg
2017
m MT
2017
%Chg
Dry Bulk 4.34 1.34 7% 4.79 10%
Liquid Bulk 4.92 0.99 -36% 4.12 -16%
Break Bulk 1.81 0.42 3% 1.69 -6%
Cement 0.75 0.06 -47% 0.34 -55%
Total^ 11.80 2.81 -16% 10.93 -7%
RORO k units 141.4 40.7 26% 138.2 -2%
^May not add up due to rounding% Split based on data as of 19th January 2018
Revenue & Cost
12
4Q17 Fuel +12% has moderated further from previous quarters
2017 Marine cost eased, revised tug-pilot boats arrangement.
Lower MWh of electricity used. Manpower has lesser overtime
4Q17 Lower container revenue reflect net basis under MFRS15
2017 Marine revenue declined with lesser vessel calls by 12%.
Rental increased with step-up in tiered-rates on land lease
Cost Of Sales Breakdown (RM million)Segmental Revenue (RM million)
Operational
Revenue
2016
RM m4Q17
RM m
4Q17
%Chg
2017
RM m
2017
%Chg
Container 1,536 366 -9% 1,451 -6%
Conventional 147 38 4% 145 -1%
Marine 84 19 -5% 78 -7%
Rental 37 11 7% 42 12%
Op. Revenue 1,804 435 -7% 1,716 -5%
Construction 231 139 33% 373 62%
Total Revenue^ 2,035 574 0% 2,089 3%
Operational
Cost Of Sales
2016
RM m4Q17
RM m
4Q17
%Chg
2017
RM m
2017
%Chg
Container 331 74 -17% 282 -15%
Conventional 22 5 3% 22 -3%
Marine 36 7 -24% 32 -12%
Fuel 64 22 12% 82 28%
Electricity 33 8 -4% 32 -2%
Manpower 183 41 -16% 179 -2%
Depreciation 145 45 17% 162 12%
Op. Cost 813 203 -8% 790 -3%
Construction 231 139 33% 373 62%
Total Cost^ 1,044 341 5% 1,163 11%
^May not add up due to rounding
Overall Results & Profitability Margins
13
4Q16 4Q17 %Chg 2016 2017 %Chg On YTD Performance
Container million TEUs 2.55 2.22 -13% 9.95 9.02 -9% Transhipment -16%. Gateway +10% and
constitute 31% of total. Export +10% as
import +8%. Conventional decline due to
lower bunker and cement volumeConventional million MT 3.33 2.81 -16% 11.80 10.93 -7%
Operational RM million Lower container revenue and cost both
reflect MFRS15. Fuel cost hike eased
further to +12% from 1Q17 of +84%.
Electricity cost is in-line with volume.
Higher depreciation reflected container
terminal expansion at CT8 and CT9
Revenue 469 435 -7% 1,804 1,716 -5%
Cost Of Sales -220 -203 -8% -813 -790 -3%
Gross Profit 249 232 -7% 991 926 -7% 2016 EBITDA is RM967m if investment
gain is excluded and if this is compared to
2017, current period EBITDA would be
lower by 4% instead of by 6%. And if fuel
cost were to be identical for two years,
2017 EBITDA would be RM949m, only 2%
lower compared to previous year’s
EBITDA without investment gain
EBITDA 234 214 -8% 987 930 -6%
EBITDA * 49.9% 49.3% 53.6% 54.2%
Results From Op. Activities 191 164 -14% 819 745 -9%
Profit Before Tax 174 145 -17% 755 677 -10% 2017 PBT reflected the reversal of
impairment of trade receivable made in
the previous year. The effective tax rate
declined to 4% in 2017 with completion
and capitalisation of 300-metre of CT8
Phase 2 wharf, 600-metre CT9 wharf,
container yard at CT8 and yard Zone Y
CT9. Capitalised QCs, RTGCs and TTs
PBT * 37.1% 33.4% 40.7% 39.4%
Tax -19 66 nm -118 -25 -78%
Tax Rate -11.0% 45.1% -15.6% -3.7%
Profit After Tax^ 155 211 36% 637 652 2%Spent capital expenditure amounting to
RM812m. With ITA, 2017 PAT +2%
^May not add up due to rounding* 2016 margins calculated by excluding investment gain
Cash Flows & Total Borrowings
14
Generated RM1.1bn net cash from operating activities
Cash/deposits of RM524m and pledged deposits of
RM36m after 1st interim dividend of RM217m and also
while part-funding requirements of CT8-CT9 container
terminal expansion
Sukuk Musharakah Medium Term Note (SMTN)
Tenure
• 20 year Sukuk Musharakah Medium Term
Note program obtained on 20 April 2011• Valid unless it has been redeemed, cancelled
or repurchased by WMSB
Nominal Value RM2,000 million available for issuance
Drawdown
Total RM1,500m
• 03 May 2011 of RM450 million• 01 April 2013 of RM250 million• 23 Oct 2013 of RM200 million• 03 April 2014 of RM250 million• 07 August 2017 of RM200 million• 13 December 2017 of RM150 million
Utilisation of
Proceeds
• Refinance previous SUKUK programme• Capital expenditure & assets acquisition• Working capital
Repayment
Schedule
• RM450 million – 6 tranches, 2021-2026• RM250 million – 4 tranches, 2025-2028• RM200 million – 5 tranches, 2024-2028• RM250 million – 4 tranches, 2021-2024• RM200 million – 2 tranches, 2019-2020• RM150 million – 3 tranches, 2021-2027
Total borrowings of RM1,500m all in SMTN with recent
drawdowns in Aug2017 and Dec2017. Previous unsecured
Revolving Credit Facility of RM150m in mid-2017 has been
fully repaid
Net debt-to-equity ratio of 0.41x as at Dec17
Consolidated Cash Flows
RM million 2016 2017
Operating Profit Before
Working Capital Changes988 926
Cash Generated
From Operations1,066 1,187
Net Cash Generated
From Operating Activities882 1,085
Net Cash Used
In Investing Activities-361 -799
Net Cash Used
In Financing Activities-498 -150
Net Change In
Cash & Cash Equivalents23 136
Cash & Cash Equivalents
As At 1st January365 388
Cash & Cash Equivalents
As At 31st December388 524
Dividend & Outlook
15
Payout ratio of 75%
Semi-annual distribution of dividend since IPO
2nd interim dividend of RM271m for 2H 2017
Has maintained payout ratio even with container
terminal capacity expansion
Container volume growth of low single-digit percentage
rate in 2018
Tariff revision scheduled in Sep2018
Operational enhancement with new Terminal Operating
System and gradual improvement in terminal utilisation
CT10 to CT19 proposed expansion, ongoing preparation
Dividend Distribution Track Record
Dividend
Per Share (RM)
Financial
YearEx-Date
Payment
Date
2nd Interim Div 7.95 sen 2H 2017 21 Feb 2018 06 Mar 2018
1st Interim Div 6.372 sen 1H 2017 01 Aug 2017 15 Aug 2017
2nd Interim Div 6.70 sen 2H 2016 22 Feb 2017 08 Mar 2017
1st Interim Div 7.30 sen 1H 2016 09 Aug 2016 23 Aug 2016
2nd Interim Div 5.78 sen 2H 2015 17 Feb 2016 02 Mar 2016
1st Interim Div 5.32 sen 1H 2015 13 Aug 2015 26 Aug 2015
2nd Interim Div 6.15 sen 2H 2014 26 Feb 2015 11 Mar 2015
1st Interim Div 5.10 sen 1H 2014 07 Aug 2014 20 Aug 2014
2nd Interim Div 5.22 sen 2H 2013 26 Feb 2014 11 Mar 2014
Outlook 2018
Contiguous quay length of 5.8 kilometres upon completion of CT9’s 600-metre wharf
Thank You
Westports Holdings Berhad
http://westportsholdings.com/
http://westportsmalaysia.com/
2016 Annual Report
http://ir.chartnexus.com/westportsholdings/docs/ar2016_hres.pdf
2016 Sustainability Report
http://ir.chartnexus.com/westportsholdings/docs/Westports%20201704%20Sustainability%20Rep%202016.pdf
Chang Kong Meng
Email: chang@westports.com.my
Contact: +6 03 3169 4047
Mobile No: +6 012 5123 813
This document contains certain forward-looking statements with respect to Westports Holdings Berhad’s (“Westports”) financial condition, results of
operations and business, and management’s strategy, plans and objectives for Westports. These statements include, without limitation, those that express
forecasts, expectations and projections such as forecasts, expectations and projections in relation to new products and services, revenue, profit, cash flow,
operational metrics etc. These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance
and are subject to risks, uncertainties and other factors, some of which are beyond Westports’ control, are difficult to predict and could cause actual results to
differ materially from those expressed or implied or forecast in the forward-looking statements. All forward-looking statements in this presentation are based
on information known to Westports on the date hereof. Westports undertakes no obligation publicly to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. This presentation has been prepared by Westports. The information in this presentation,
including forward-looking statements, has not been independently verified. Without limiting any of the foregoing in this disclaimer, no representation or
warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of such information. Westports and
its subsidiaries, affiliates, representatives and advisers shall have no liability whatsoever (whether in negligence or otherwise) for any loss, damage, costs or
expenses howsoever arising out of or in connection with this presentation.