APM Terminals said it is accelerating cost-saving efforts at its headquarters and all controlled entities as profit fell 30 percent year-over-year in the second quarter to $112 million.
The Netherlands-headquartered company booked an underlying profit excluding one-time items of $109 million, down 31 percent on the $159 million booked in the second quarter of last year.
APMT handled 9.4 million twenty-foot-equivalent units in the second quarter, representing a year-over-year increase of 2.6 percent, attributed primarily to the acquisition of Grup Maritim TCB. Like-for-like throughput increased by just 0.2 percent with strongest growth registered at terminals in Southeast and Northeast Asia.
“Profits remain under pressure as terminals in oil dependent markets face declining volumes and commercially challenged terminals in Latin America, northwest Europe and Egypt have not regained business to compensate earlier lost services,” Maersk Group said in its second-quarter results announcement.
Revenue during April, May and June expanded 3 percent to $1.064 billion from $1.033 billion the previous year, while earnings before interest, taxes and amortization fell 9.2 percent to $187 million.
The revenue performance is a significant improvement on the first-quarter performance, when revenues dropped 15 percent, and the fall in second-quarter profit is also less severe than the 43 percent fall reported in the first quarter.
Staff redundancies implemented over the first half of the year had saved the company $46 million, and the company is accelerating cost-saving initiatives, the group said.
“Terminals and inland facilities most severely impacted by lower volumes are currently subject to centrally guided structural cost reviews to identify and execute further cost reductions.”
APMT is integrating the operations of the eight Grup Maritim TCB terminals acquired in March; a process it says is proceeding well despite it becoming swept up in a bribery scandal related to one of the terminals it acquired that predated the takeover deal and APMT assuming control of the terminal.
The company said it was cooperating with local authorities investigating the concession for the Terminal de Contenedores Quetzal in Guatemala. APMT agreed to pay $43.2 million as part of a deal for a new concession at the terminal. The agreement, which reportedly includes calls for installation of a $6 million container scanning system, must receive the approval of the Guatemalan congress.
“Since the acquisition in March, the commercial performance across the TCB portfolio has continuously strengthened.”
Also in March, APMT signed an agreement to develop Africa’s first automated container terminal at Tangier in Morocco at a cost of $900 million. The global port operator signed a 30-year operating concession for the MedPortTangier terminal, which is scheduled to open in 2019 with an annual capacity of 5 million TEUs.
APMT in July announced it had reached an agreement with joint venture partner Aarhus Service Holding for the purchase of the remaining 40 percent of the APM Terminals-Aarhus A/S facility in Denmark’s busiest port.
APMT reported a 27.3 percent drop in net profit for 2015 to $654 million, with container throughput down 5.9 percent. Revenue decreased 4.8 percent to $4.24 billion.
The number of containers handled by the global port operator totaled 36 million TEUs in 2015, compared with 38.3 million the previous year.
APMT is not the only global container terminal operator to report a loss on growing volumes in the first quarter of 2016. Profit at International Container Terminal Services Inc. fell despite double-digit volume growth.
The troubles facing terminal operators could last through the year, with industry analyst Alphaliner expecting global container port volumes to remain flat overall in 2016.
Contact Turloch Mooney at [email protected] and follow him on Twitter: @TurlochMooney.
Turloch Mooney, Senior Editor, Global Ports
A version of this story also appeared on IHS Fairplay, a sister product of JOC.com within IHS Markit.
