KUALA LUMPUR (April 24): Westports Holdings Bhd, which expects to register weak performance in container volume in the first half of this year, expects container traffic to pick up in the second half, driven by normalisation in the realignment of shipping alliances.

However, the terminal operator in Port Klang is unlikely to recover this year to its record container volume of 9.95 million TEUs (20-foot equivalent units) seen in 2016, despite the projected improvement in the second half, its group managing director Datuk Ruben Emir Gnanalingam said.

“We expect to have a slight modest growth of low single digit for 2018. We expect to see a slight decline in the first quarter; second quarter will be flat and then, it will start growing strongly in the third and fourth quarters,” Ruben told reporters after the group's annual general meeting today. Westports handled 9 million TEUs of containers in 2017.

Usually, the impact from realignment of alliances, which began in April last year, would last for about 15 months, he said.

“This one-off adjustment (in alliances) will be completed by the first half of this year. It started in April last year and we expect the adjustment [to] end by June. 

“Of course, this is barring a trade war between China and the US. If that happens, it could have an impact on worldwide cargo and if worldwide cargo is affected, of course we will be affected as well,” Ruben added.

The realignment of alliances has resulted in a new base being created.

“The alliances actually cause the readjustment to the market and I think the market has now readjusted to the new base and we will continue to see growth, going forward.

“If we are lucky enough, we might see growth earlier than that,” he said.

The realignment in shipping alliances include Ocean Alliance of CMA CGM, China Cosco Shipping, Evergreen and Orient Overseas Container Line.

Westports posted a 5.6% rise in net profit to RM651.51 million in the financial year ended Dec 31, 2017 (FY17), from RM616.83 million in FY16, while revenue grew 2.6% to RM2.09 billion, from RM2.04 billion.

However, Westports' operational revenue dipped 5% year-on-year to RM1.716 billion in FY17, mainly due to a reduction in container throughput.

On its expansion plan, Ruben said Westports, which is currently undertaking a technical study aimed at doubling its container-handling capacity, is expected to invest up to RM15 billion over the next 20 years.

“We expect operations at Container Terminal (CT) 10 to CT19 to kick start within two years,” Ruben said.

The 10 new CTs will boost the port's capacity by 16 million TEUs, raising total capacity to about 30 million TEUs. Westports currently operates nine CTs, namely CT1 to CT9.

Westports shares closed down 4 sen or 1.18% at RM3.36 today, with 746,200 shares done, bringing a market capitalisation of RM11.46 billion.