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

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