Asia-based container port operators are expected to strike pay dirt in 2015 as global box traffic growth and trans-Pacific demand are seen to strengthen, according to a new report from Hong Kong Shanghai Banking Corporation (HSBC).
HSBC’s latest “Transport Indicators” predicts that international container trade growth of about 5% last year will continue through 2015, and that robust Asia-U.S. trade will benefit Asian terminals in particular.
But a cloud on the horizon is rising labor costs, which will be putting pressure on profits and prompting some port operators to attempt to raise handling fees, added the report.
The paper said the profitability of major Asian port groups would mostly come from acquisitions as organic growth slows in the face of port congestion in key ports globally. Ports are likely to respond with further investments in infrastructure such as for cranes and yard space, designed as well to accommodate bigger vessels and the launch of the 2M and Ocean Three operations.
HSBC said that among the biggest winners for the year will be Philippines-based International Container Terminal Services, Inc. (ICTSI), which has a huge portfolio of projects for 2015. ICTSI’s profits will be boosted with the opening of its terminals in Argentina and Colombia this year and by the operational traction from its new operations in Mexico and Honduras that is set to kick in by the second half of this year.
Also predicted to make hefty profit and strong inorganic growth this year is China Merchants Holdings International, China’s largest port operator and investor with a US$2.5-billion funding for its investment projects over the next two years, as well as Cosco Pacific with its purchase of Asia Container Terminals last year.
DP World to sink up to $1.9B in capacity investments
Meanwhile, DP World reportedly seeks to increase its investments palpably in 2015 as the fourth largest global port operator aims for a 14% increase in capacity.
The Dubai-based operator is looking to spend between US$1.4 billion and $1.9 billion this year, up from $1 billion last year, and invest from $500 million and $700 million from 2016 to 2020.
Capacity at DP World will rise to more than 80 million twenty-foot equivalent units (TEUs) this year from 70 million TEUs last year through expansions in Jebel Ali in Dubai, Turkey, Rotterdam, and India. The company plans to boost capacity to 100 million TEUs by 2020.
The port group said its net cash from operating activities increased to $551 million in the first six months of 2014, while its net profit for the same period climbed 26% to $332 million year-over-year.
Photo: Danny Cornelissen
