[190218.EN.BIZ] APMT Loses US$168m in 2017 Despite Increase in Volumes

APM Terminals suffered a net operating loss of US$168 million in 2017, down from earnings of $438 million in 2016 despite an increase in cargo volumes handled at the terminals it both owns and operates worldwide.

Overall container throughput volumes in 2017 rose by 6.5 per cent over the previous year to reach 39.7 million TEU.

The company said in its earnings report announcement: "APM Terminals faced various commercial challenges in 2017, which resulted in rate pressure, leading to lower revenue per move and impairments in challenged markets."

Volume growth was driven by the strong performance of its terminals in North Asia, Latin America and on account of additional throughput garnered through its sister company Maersk Line.

Revenue totalled $4.1 billion, down slightly from 2016. Revenue was negatively impacted by the loss of services in North America and exchange rate losses related to its terminals in Africa, reported IHS Media.

"The average port revenue per move, based on the consolidated revenue excluding construction revenue, decreased to $193 per move [down from $198 per move], mainly due to market rate pressure and the rate-of-exchange impact at some of the African terminals," the company said.

The company said that despite signs of stability in some markets, it expected what it described as "industry-wide market challenges and rate pressure" to continue in 2018.

The upcoming mergers of "K" Line, MOL and NYK, as well as Cosco and OOCL may result in continued rate pressure across the market, the company pointed out.

Earlier in the year APM Terminals announced a major shift in commercial strategy with the intention to increasingly focus on inland services for beneficial cargo owners.

"Liner customers are rapidly becoming fewer but there are thousands of landside customers large and small for us to also focus on. We have always done business with these customers and it is important for us to serve them well and ensure a better flow through the whole supply chain," said chief commercial officer Henrik Lundgaard Pedersen.

Mr Pedersen said it was unlikely APM Terminals would invest in new deepsea terminals over the coming years and it was focused on completing pipeline terminal projects including those in Italy, Costa Rica, Morocco and Ghana.

"We have put a lot of capital into the ground over the past number of years and we will take a breather from this for a while. We have such a massive portfolio that we will continue to divest non-core assets, but overall we are still a net investor [in deepsea terminal infrastructure]," Mr Pederson said.

Source : HKSG.