KUALA LUMPUR (May 9): Westports Holdings Bhd (KL:WPRTS) on Friday cut its outlook, and now expects no growth in container volume this year amid escalating international trade tensions.
Container throughput this year will likely match 2024’s levels, the company said in a statement after reporting a 9% year-on-year increase in first-quarter earnings. Westports had expected a “low single-digit” container volume growth for this year when it announced 2024’s results in February.
Rising tariff rates and the resulting inflationary pressures could curtail consumers’ purchasing power and consumption, raising the risk of economic slowdowns or even a recession in major trading nations, Westports flagged.
“Lower containerised trade could potentially emerge as a near-term impact,” the company cautioned. “However, regional trade realignment and Asia’s economic dynamism could partially mitigate the downward pressure on container volume.”
Net profit for the first quarter ended March 31, 2025 (1QFY2025) was RM222.46 million, or 6.52 sen per share. The increase was largely due to an increase in containers handled, which lifted revenue to RM621.30 million, a 14% increase when compared to the same period last year.
The company noted that labour, the largest cost component, rose by 7% amid a higher minimum wage, though lower costs of unsubsidised diesel for its terminal operations and other fuels helped during the quarter.
No dividend was declared for the current quarter under review.
Despite the tariff uncertainties, the company said it will continue to expand its ports.
“The container terminal expansion at WP2 will continue towards completion by 2028 as we anticipate higher demand for terminal handling facilities by the time we commission CT10 into service,” said Westports executive chairman Datuk Ruben Emir Gnanalingam.
Westports handled a record 2.69 million 20-foot equivalent units (TEUs) of containers in 1QFY2025. Intra-Asia trade was the primary contributor, accounting for 63% of total containers that passed through its ports.
The conventional segment, which handles dry bulk and other goods shipped in non-standard containers, handled 2.95 million tonnes, a 7% increase mainly from palm oil and liquefied petroleum gas.