Monday, March 28, 2011

Northport’s RM300m expansion depends on lease renewal

The implementation of the RM300mil expansion plan ofNorthport (M) Bhd, a port- operating subsidiary of NCB Holdings Bhd, will have to depend on the prospects of the lease renewal for the port.
NCB chairman Tun Ahmad Sarji Abdul Hamid said it had submitted the lease renewal application to the Government last week and was hoping for a favourable reply.
“Our application for renewal is done professionally where we have engaged a consultant for the input.
“We have been this business for more than two decades and possess the know-how of the business.
“The renewal of lease is crucial for us as it will determine our prospects.
“We are all geared up for expansion, and we hope that our early submission, site visits and discussion with the Government would accelerate the decision-making process.
“Assurance from the Government is a crucial factor in our expansion plan roll-out,” he told reporters after NCB's AGM yesterday.
Northport's 21-year lease agreement will expire in 2013. It has spent more than RM1.5bil on development since its privatisation about 25 years ago.
Nevertheless, Ahmad Sarji did not deny the fact that there could be other contenders eyeing the lease agreement for the port operation as well.
“I am always inclined to be prudent and cautious.
“There may be other contenders but at this juncture I don't know if there are any or who they are,” he said.
On the RM300mil expansion, Ahmad Sarji said Northport needed to expand its capacity due to increased demand and had initiated the development of wharf 8A into container terminal four.
The construction is planned to start in the second half of this year and expected to be completed in 2013.
This is part of Northport's RM580mil three-year expansion plan that was launched in 2008 but had been postponed due to the global economic downturn.
Ahmad Sarji also explained that the development of Southpoint, a terminal at Northport dedicated for the handling of non-containerised or conventional goods, would depend on the business review of Southpoint before a budget was allocated for its expansion.
Recently, concerns were raised by users of Southpoint, especially exporters of palm oil, on expanding and improving its storage installations and distribution facilities.
On its key performance indicators this year, Ahmad Sarji expects container volume at Northport to increase by 5% to about 3.5 million twenty-foot equivalent units (TEUs) in line with the country's manufacturing and gross domestic production prospects. Last year Northport recorded a 15.6% increase in container volume.
“For Kontena Nasional Bhd (NCB's haulage arm subsidiary), we are embarking on halal logistics business and cold-chain warehousing services.
“Of equal importance, especially for Kontena Nasional, is the cost cutting measures via the introduction of a tracking system that would improve the turnaround time and management of its assets,” he said.
NCB reported a net profit of RM137.4mil for the financial year ended Dec 31, 2010, down 2.5% from a year ago.
Its revenue for the period surged to RM887.9mil from RM831.4mil in 2009.
For the year under review, NCB's proposal for a final and special dividend of 30 sen per share less 25% tax was approved at the AGM.
This will see a payout of RM105.8mil on May 6.
Incorporating the interim dividend of 7 sen per share that was paid in last October, the total payout would accumulate to RM130.5mil.
“This is equivalent to about 95% distribution of our profits. NCB dividend policy complies with Perbadanan Nasional Bhd's of about 75% profits distribution,” he said.
Source: BizStar

Northport expects more traffic in 2011

Northport (Malaysia) Bhd, the port operating subsidiary of NCB Holdings Bhd, expects to handle 3.5 million twenty-foot-equivalent units (TEUs) this year against 3.3 million TEUs recorded last year. 

NCB Holdings Chairman Tun Ahmad Sarji Abdul Hamid said the group was optimistic of achieving the target based on improved global trade and the country's manufacturing output. 

The group will spend RM300 million for the expansion of Northport's terminal facility in response to increased demand, he told reporters after NCB Holdings annual general meeting here today. 

The new facility, to be constructed in the second-half of the year and completed by 2013, would increase Northport's capacity towards the vicinity of 5.5 million TEUs. 

Meanwhile, Ahmad Sarji said the NCB group has submitted a proposal to the government to renew Northport's licence which was due to expire in 2013. 

"We submitted this proposal and would like the authority to see how we operate. We hope the early submission of this proposal and with the authorities coming over to see our facilities will help accelerate the decision making process and thereby give us a good lead time for expansion," he added. 

He also said the RM300 million facility expansion was indicative of the group's earnest to pursue its business. 

"We hope this thing (investment) will add to our merit in persuading the authority to consider us favourably for the renewal of our lease," he said

Wednesday, March 23, 2011

Baltic Dry Index sheds 1.8% a week after Japan quake

A week after the tsunami disaster in Japan, the Baltic Dry Index (BDI), the benchmark index for commodity shipping, slid by 1.8% to 1,533 points on Thursday.
This was an indication that the reconstruction efforts by Japan had done little to boost dry bulk shipping freight rates that have been on a downtrend year-to-date.
So far this year, the BDI peaked at 1,693 points on Jan 4 and the lowest was at 1,043 points on Feb 4.
Dry bulk vessels carry global commodities such as coal, finished steel, grain, sand or gravel which are vital construction materials.
Dry bulk rates were under pressure from last year to the first quarter of this year due to the flooding in Queensland, Australia since there were fewer coal shipments to be exported. Australia is of the world’s largest overall coal exporters.
According to Reuters, Japan’s reconstruction efforts would do little to boost global freight rates that were nearing two-year lows as fleet expansion overshadowed any demand surge from the world’s third largest economy.       
The report cited Hong Kong-based Citigroup shipping analyst, Rigan Wong, who said there was as much as a 10% difference between demand and supply growth this year.
“Japan alone will not be able to push up demand in line with supply. That just isn’t possible,” he said.
Macquarie Securities shipping analyst Janet Lewis said she didn’t think Japan would affect dry bulk rates all that much.
“I still think we could see fresh two-year lows. Through the end of the second quarter, we will see the BDI firming up but probably not a whole lot higher than where we are now. I don’t expect we will get above 2,000 points anytime soon. Maybe we can get up to 1,700,” she said.
Reuters also reported that the supply glut was best reflected by the severe downturn in the daily earnings of cape-size vessels, which briefly dipped below US$5,000 in February after surging to nearly US$60,000 eight months before. Earnings traded at US$9,430 on Thursday.
Dry bulk ship owners ramped up orders of vessels before the economic downturn in 2008. It normally takes three years for a ship to be delivered and most of those vessels are now coming online, exacerbating an already oversupplied market.
The Reuters report also quoted an analyst who said the world’s dry bulk fleet, responsible for shipping iron ore, coal, grains and other commodities, was expected to grow between 11% and 13% this year to top an unprecedented 600 million deadweight tonnes - that would far outpace demand of between 5% and 8%.
On the bright side, the report said many of the ports in Japan were unscathed by the earthquake, providing ample capacity to import coal and other dry bulk goods.
Source: BizStar