Westports Holdings Berhad Corporate Presentationapp.pmgasia.com/InvestAsean2018/pdf/MY Westports... · Corporate Overview 2 Company Snapshot Revenue Track Record (RM million) Commencement

Westports Holdings Berhad

Corporate Presentation4th Quarter 2017 Financial Results

Corporate Overview

2

Revenue Track Record (RM million)Company Snapshot

Commencement

& concession

• 1 August 1994• Concession runs through to 2054

Nature of

businessPort development and management of port

operations

Port location Port Klang, Malaysia

Port overview

& capacity

• 31 berths • Total quay length measuring 8.4 km

• Container terminal facilities with

contiguous linear berth of 5.8 km• Container capacity 14.0m TEUs per year

Achievements • The 2nd busiest port in South East Asia,

ranked by volume of containers handled• Ability to support the world’s largest

container vessels of 19,000 TEUs• Productivity record of 793 moves per hour

(mph) with deployment of 9 Quay Cranes

on CSCL Le Harve in 2014• For the year 2017

• Market leader in Malaysia with 38% of

market share for containers handled • Container throughput handled of 9.02m

TEUs• Achieved operational revenue of RM1.7

billion

Container Conventional Marine Rental

Terminal

handling

services

Value-added

services

• Storage

• Reefer

• Special

• Removal

• Container

freight

• Other

services

• Dry bulk

• Liquid bulk

• Break bulk

• Roll-on roll-

off services

(RORO)

• Cement

• Tug boat

• Pilotage

Rental of land,

storage

facilities and

office space

• Generally

used by

larger

conventional

cargo

customers

• On-dock

depot

services

Contribution To Operational Revenue In 2017

85% 8% 5% 2%

1,115 1,226 1,348 1,503 1,578 1,804 1,716

1,387 1,4921,712

1,562 1,682

2,035 2,089

2011 2012 2013 2014 2015 2016 2017

Operational Construction Total

Shipping Lane Density Major Population Centres Strategic Location Of Westports

• Port Klang is located ~12 nautical miles from the

Straits of Malacca shipping lane

• Westports is strategically situated on 535.47 ha land

fronting Straits of Malacca

• At least 80,000 vessels sail through the Straits of

Malacca annually

• Port Klang has grown to be the 12th busiest port

globally and 2nd busiest in Southeast Asia

• Global and regional connectivity makes Westports

an attractive transhipment hub. Established

connections to more than 350 ports around the world

• Port Klang is the gateway for Import/Export cargo for

the immediate hinterland of the Klang Valley (which

includes both Kuala Lumpur and Putrajaya)

• Klang Valley is the heartland of Malaysia’s industry

and commerce. Also has approximately 34% of

Malaysia’s total population

• Numerous intermodal connections within

Peninsular Malaysia and with neighbouring countries

have contributed to Westports’ positioning as a

preferred gateway for Import/Export cargo

Strategic Location For Transhipment & Gateway Traffic

3

Primary Hinterland

Secondary Hinterland

PTP

PSA

Published Tariff On 20’ Container For Transhipment

Port

Klang

Port Of

Tanjung Pelepas

PSA

Singapore

RM 161

(USD41)

RM 200

(USD51)

SGD 115

(USD87)

source : bioval.jrc.ec.europa.eu source : geology.com source : wikimedia.org

Westports

High Asset Productivity

4

World-Class Productivity

2123

2426

2830

31

35

1998 2000 2002 2004 2006 2008 2010 2012onwards

World Record For Container Productivity

Year VesselRecord

(mph)

Crane

Deployment

2014 CSCL Le Harve 793 9

2011 CSCL Pusan 734 9

2009 CMA CGM Orfeo 665 9

2006 CMA CGM Rossinni 421 7

2006 CMA CGM Puccini 452 8

2006 CMA CGM Bizet 456 8

Container Terminal Utilisation

Crane Moves Per Hour (mph)

70-100 mph per vessel on main line vessels

50 mph per vessel on feeder vessels

Welcoming Bigger Container Vessels

2,900

6,600

8,400

14,100

16,000

19,000

1996 1999 2006 2011 2012 2014

Size Of Container Vessels That Can Be Accommodated By TEUs

Water depth of 17.5 meters can

accommodate the world’s largest

vessels. 19,100 TEU MV CSCL

Globe and similarly-sized vessels

call at Westports

76% 77% 79% 76% 82% 87%

69%

2011 2012 2013 2014 2015 2016 2017

Approximate effective average utilisation *

*

*

Milestones & Achievements

5

Westports Container Volume Evolution (million TEUs)

Westports Market Share Of Container Volume

Strong government support

Key customers

Productivity Snapshots

Year 1996 End-2017

Deepest Draft 15.0 metres 17.5 metres

Container Berths 600 metres 5.8 kilometres

Quay Cranes 9 units 67 units

Crane Productivity 35 mph per crane

for larger vessels

(size over 300m)

Handling Capacity 1.0m TEUs 14.0m TEUs

Established Relationships

0.0 0.10.5

0.8 1.01.5

2.0 2.3 2.62.9

3.74.3

5.04.5

5.66.4

6.97.5

8.49.1

9.9

9.0

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

Gateway Transhipment Total

Container throughput has grown

every year since inception except

in 2009 when the Global Financial

Crisis affected global trade. M&As

involving our key clients and also

alliance changes affected 2017’s

volume

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

% of Port Klang % of Malaysia

% of Straits of Malacca % of Southeast Asia

In the year 2017

75% of Port Klang

38% of Malaysia

16% of Straits of Malacca

9% of Southeast Asia

Visionary Leadership & Corporate Culture

Tan Sri Datuk G. Gnanalingam

Successfully secured the concession

and started Westports in 1994

Chartered Institute of Logistics and

Transport’s CILT Achiever of the

Year 2007 award

Life Time Achievement in Port /

Terminal Industry award by Global

Ports Forum in 2017

Value Creator : Malaysia’s

Outstanding CEO award by The

Edge Billion Ringgit Club in 2017

Hutchison Port Holdings Limited’s

representatives bring invaluable

expertise and relationships to guide

long-term strategic growth

6

Major Shareholders

Pembinaan Redzai Sdn Bhd, Semakin Ajaib Sdn Bhd 45.52%

South Port Investment Holdings Limited 23.55%

Board Of Directors

Tan Sri Datuk G. Gnanalingam • Non-Independent Executive Chairman

Datuk Ruben Emir Gnanalingam • Group Managing Director

Tan Sri Dato’ Nik Ibrahim Kamil Bin

Tan Sri Nik Ahmad Kamil

• Independent Non-Executive

• Chairman Nomination, Remuneration

And Corporate Governance

Committee

Dato’ Yusli Bin Mohamed Yusoff • Independent Non-Executive

• Chairman Audit And Risk

Management Committee

Ip Sing Chi • Non-Independent Non-Executive

Ruth Sin Ling Tsim • Non-Independent Non-Executive

Tan Sri Ismail Bin Adam • Independent Non-Executive

Chan Chu Wei • Non-Independent Non-Executive

Kim Young So • Independent Non-Executive

Chan Soo Chee • Independent Non-Executive

Shanthi A/P Kandiah • Independent Non-Executive

John Stephen Ashworth • Alternate Director To Ip Sing Chi &

Ruth Sin Ling Tsim

Corporate Culture

T Teamwork

A Accountability & Integrity

N Now Culture

S Safety Conscious

R Responsible

I Innovative

G Good Family Values

Delivering the

best-in-class level

of service is and will

always be our top

priority as we can

only grow when our

customers grow

faster than us

Comprehensive Port Infrastructure

7

Dry Bulk Terminal II Liquid Bulk Terminal Dry Bulk Terminal Break Bulk Terminal Container Terminals

Berths

Total of 31 berths with an

aggregate length of 8.4km

24 of the berths are contiguously

connected in a straight line with

total length of 5.8km. Maximum

usable quay length and flexibility

in vessels berthing

Natural deep harbour

Protected harbour. Natural

shelter eliminated the need for

artificial breakwaters

Southern approach into Port

Klang has a deeper channel than

northern approach – larger ships

have to enter Port Klang using

southern approach

PKA deepened entrance channel

to Westports from 17m to 18.5m

Deepest berth is now able to

handle the largest vessels in the

world

Terminal expansion designed to

handle container vessels that are

growing in TEU capacity

Easy access to 405-ha Port Klang

Free Zone

Integrated 405-ha customs-free

commercial and industrial zone

Terminal Expansion Led Growth

8

CT9 Wharf

Capacity Expansion m TEUs

0 5 10 15

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Track record of growing

capacity from 2m TEUs in 1996

to 14m TEUs by end-2017

Latest expansion at CT8 and

CT9 were completed at end-2017

Approval-in-Principle for CT10 to

CT19 expansion that would raise

capacity to 30m TEUs per annum

CT8 & CT9 Expansion

9

Current Construction Status At CT8 & CT9

Capital Expenditure By Components

RM million 2015 2016 2017 2018f Total

Construction 104 227 362 61 754

Equipment 117 224 417 39 797

CT8 & CT9 221 451 779 100 1,551

Maintenance 31 40 33 79 183

Total Capex^ 252 491 812 179 1,734

CT9 wharf and container yard zone Y is now completed

Container Terminal Expansion Plan

CT8 Facilities • 600 metres of wharf and container yard

• Back-of-the-terminal facilities: 2nd container gate,

marshaling centre and container freight station

• 14 units of Quay Cranes

• 15 units of Rubber Tyred Gantry Cranes

• Terminal tractors and trailers

Timeline • Commenced in January 2015

• Phase 1 completed 300-metre wharf. Operational since

May2016 with 4 new 52-metre high QCs

• Phase 2 additional 300 metres of wharf, CT8 container

yard and more TOEs. Wharf completed in Aug2017

Capacity • When all the facilities have been completed & terminal

handling equipment is delivered, total capacity is

expected to increase to 13.5 million TEUs per annum

Capex • Total capex for CT8 of RM1.17 billion

• Capex in 2017 for Phase 2 development

• Funded mainly by internally generated funds and

short-term bank borrowings

CT9 Facilities • 600 metres of wharf

• 2 units of Quay Cranes

• 13 units of Rubber Tyred Gantry Cranes

• Terminal tractors and trailers

Timeline • Phase 1 was completed by Dec2017

Capex &

Capacity

• Wharf construction work and additional TOEs cost

RM559 million

• Total terminal handling capacity has now increased to

14.0 million TEUs per annum

^May not add up due to rounding

4Q17 Volume -13%. Gateway +15% while transhipment -23%

2017 Overall -9%. Gateway +10% as transhipment -16%. More

favourable gateway : transhipment ratio of 31 : 69

MFRS 15 will supersede MFRS 118 Revenue, MFRS 111

Construction Contracts and revenue related interpretations

issued by the Malaysian Accounting Standards Board

It is effective for financial periods beginning on or after

1st January 2018, with earlier application permitted

Measures taken towards compliance

Essentially, under MFRS 15, marketing cost included under the

Cost of Sales will have to net to revenue

From 1st January 2017, Westports reported container revenue

from a selected portfolio of contracts have been recognised on

a net basis

From 1st January 2018, Westports will now fully comply with

MFRS 15 by netting all marketing cost to revenue

Impact – neutral to the bottom line

Westports container revenue and container cost in 2017 have

both decline, this is partly attributable to marketing cost which

is now netted to revenue (for a selected portfolio of contracts)

when compared to the previous corresponding period

GP, PBT and PAT absolute numbers are not affected by the

steps taken towards compliance with MFRS 15

S.E.A. Container Hub

10

6.567.39

6.22

2.49

2.56

2.81

9.05

9.95

9.02

2015 2016 2017

Transhipment Gateway Total Throughput

-9%


Total Container Throughput (million TEUs)MFRS 15 Revenue from Contracts with Customers

Throughput Volume

11

4Q17 Liquid bulk partly due to bunker volume re-classification.

Cement declined with lower construction activities and demand

2017 Dry bulk growth due to fertilizer and copper concentrate

4Q17 Asia-Australasia’s volume improved with new services

2017 Intra-Asia growth raised this trade lane to 57% from 48%

in 2016 while Asia-Africa reflected client’s services re-alignment

Trade Lane4Q17

TEU m

4Q17

%Chg

2017

TEU m

2017

%Chg

2017

%Split

Intra-Asia 1.34 6.5% 5.15 7.8% 57.1%

Asia-Europe 0.26 -61.7% 1.72 -32.1% 19.0%

Asia-Australasia 0.24 12.6% 0.87 6.4% 9.6%

Asia-America 0.19 5.8% 0.76 -3.8% 8.4%

Asia-Africa 0.07 -61.5% 0.31 -63.6% 3.5%

Others 0.12 206.7% 0.22 25.6% 2.4%

Total^ 2.22 -12.8% 9.02 -9.3% 100%

Conventional Throughput (million Metric Tonne)Container Throughput By Trade Lanes

Cargo2016

m MT

4Q17

m MT

4Q17

%Chg

2017

m MT

2017

%Chg

Dry Bulk 4.34 1.34 7% 4.79 10%

Liquid Bulk 4.92 0.99 -36% 4.12 -16%

Break Bulk 1.81 0.42 3% 1.69 -6%

Cement 0.75 0.06 -47% 0.34 -55%

Total^ 11.80 2.81 -16% 10.93 -7%

RORO k units 141.4 40.7 26% 138.2 -2%

^May not add up due to rounding% Split based on data as of 19th January 2018

Revenue & Cost

12

4Q17 Fuel +12% has moderated further from previous quarters

2017 Marine cost eased, revised tug-pilot boats arrangement.

Lower MWh of electricity used. Manpower has lesser overtime

4Q17 Lower container revenue reflect net basis under MFRS15

2017 Marine revenue declined with lesser vessel calls by 12%.

Rental increased with step-up in tiered-rates on land lease

Cost Of Sales Breakdown (RM million)Segmental Revenue (RM million)

Operational

Revenue

2016

RM m4Q17

RM m

4Q17

%Chg

2017

RM m

2017

%Chg

Container 1,536 366 -9% 1,451 -6%

Conventional 147 38 4% 145 -1%

Marine 84 19 -5% 78 -7%

Rental 37 11 7% 42 12%

Op. Revenue 1,804 435 -7% 1,716 -5%

Construction 231 139 33% 373 62%

Total Revenue^ 2,035 574 0% 2,089 3%

Operational

Cost Of Sales

2016

RM m4Q17

RM m

4Q17

%Chg

2017

RM m

2017

%Chg

Container 331 74 -17% 282 -15%

Conventional 22 5 3% 22 -3%

Marine 36 7 -24% 32 -12%

Fuel 64 22 12% 82 28%

Electricity 33 8 -4% 32 -2%

Manpower 183 41 -16% 179 -2%

Depreciation 145 45 17% 162 12%

Op. Cost 813 203 -8% 790 -3%

Construction 231 139 33% 373 62%

Total Cost^ 1,044 341 5% 1,163 11%


Overall Results & Profitability Margins

13

4Q16 4Q17 %Chg 2016 2017 %Chg On YTD Performance

Container million TEUs 2.55 2.22 -13% 9.95 9.02 -9% Transhipment -16%. Gateway +10% and

constitute 31% of total. Export +10% as

import +8%. Conventional decline due to

lower bunker and cement volumeConventional million MT 3.33 2.81 -16% 11.80 10.93 -7%

Operational RM million Lower container revenue and cost both

reflect MFRS15. Fuel cost hike eased

further to +12% from 1Q17 of +84%.

Electricity cost is in-line with volume.

Higher depreciation reflected container

terminal expansion at CT8 and CT9

Revenue 469 435 -7% 1,804 1,716 -5%

Cost Of Sales -220 -203 -8% -813 -790 -3%

Gross Profit 249 232 -7% 991 926 -7% 2016 EBITDA is RM967m if investment

gain is excluded and if this is compared to

2017, current period EBITDA would be

lower by 4% instead of by 6%. And if fuel

cost were to be identical for two years,

2017 EBITDA would be RM949m, only 2%

lower compared to previous year’s

EBITDA without investment gain

EBITDA 234 214 -8% 987 930 -6%

EBITDA * 49.9% 49.3% 53.6% 54.2%

Results From Op. Activities 191 164 -14% 819 745 -9%

Profit Before Tax 174 145 -17% 755 677 -10% 2017 PBT reflected the reversal of

impairment of trade receivable made in

the previous year. The effective tax rate

declined to 4% in 2017 with completion

and capitalisation of 300-metre of CT8

Phase 2 wharf, 600-metre CT9 wharf,

container yard at CT8 and yard Zone Y

CT9. Capitalised QCs, RTGCs and TTs

PBT * 37.1% 33.4% 40.7% 39.4%

Tax -19 66 nm -118 -25 -78%

Tax Rate -11.0% 45.1% -15.6% -3.7%

Profit After Tax^ 155 211 36% 637 652 2%Spent capital expenditure amounting to

RM812m. With ITA, 2017 PAT +2%

^May not add up due to rounding* 2016 margins calculated by excluding investment gain

Cash Flows & Total Borrowings

14

Generated RM1.1bn net cash from operating activities

Cash/deposits of RM524m and pledged deposits of

RM36m after 1st interim dividend of RM217m and also

while part-funding requirements of CT8-CT9 container

terminal expansion

Sukuk Musharakah Medium Term Note (SMTN)

Tenure

• 20 year Sukuk Musharakah Medium Term

Note program obtained on 20 April 2011• Valid unless it has been redeemed, cancelled

or repurchased by WMSB

Nominal Value RM2,000 million available for issuance

Drawdown

Total RM1,500m

• 03 May 2011 of RM450 million• 01 April 2013 of RM250 million• 23 Oct 2013 of RM200 million• 03 April 2014 of RM250 million• 07 August 2017 of RM200 million• 13 December 2017 of RM150 million

Utilisation of

Proceeds

• Refinance previous SUKUK programme• Capital expenditure & assets acquisition• Working capital

Repayment

Schedule

• RM450 million – 6 tranches, 2021-2026• RM250 million – 4 tranches, 2025-2028• RM200 million – 5 tranches, 2024-2028• RM250 million – 4 tranches, 2021-2024• RM200 million – 2 tranches, 2019-2020• RM150 million – 3 tranches, 2021-2027

Total borrowings of RM1,500m all in SMTN with recent

drawdowns in Aug2017 and Dec2017. Previous unsecured

Revolving Credit Facility of RM150m in mid-2017 has been

fully repaid

Net debt-to-equity ratio of 0.41x as at Dec17

Consolidated Cash Flows

RM million 2016 2017

Operating Profit Before

Working Capital Changes988 926

Cash Generated

From Operations1,066 1,187

Net Cash Generated

From Operating Activities882 1,085

Net Cash Used

In Investing Activities-361 -799

Net Cash Used

In Financing Activities-498 -150

Net Change In

Cash & Cash Equivalents23 136

Cash & Cash Equivalents

As At 1st January365 388

Cash & Cash Equivalents

As At 31st December388 524

Dividend & Outlook

15

Payout ratio of 75%

Semi-annual distribution of dividend since IPO

2nd interim dividend of RM271m for 2H 2017

Has maintained payout ratio even with container

terminal capacity expansion

Container volume growth of low single-digit percentage

rate in 2018

Tariff revision scheduled in Sep2018

Operational enhancement with new Terminal Operating

System and gradual improvement in terminal utilisation

CT10 to CT19 proposed expansion, ongoing preparation

Dividend Distribution Track Record

Dividend

Per Share (RM)

Financial

YearEx-Date

Payment

Date

2nd Interim Div 7.95 sen 2H 2017 21 Feb 2018 06 Mar 2018

1st Interim Div 6.372 sen 1H 2017 01 Aug 2017 15 Aug 2017








Outlook 2018

Contiguous quay length of 5.8 kilometres upon completion of CT9’s 600-metre wharf

Thank You

Westports Holdings Berhad

http://westportsholdings.com/

http://westportsmalaysia.com/

2016 Annual Report

http://ir.chartnexus.com/westportsholdings/docs/ar2016_hres.pdf

2016 Sustainability Report

http://ir.chartnexus.com/westportsholdings/docs/Westports%20201704%20Sustainability%20Rep%202016.pdf

Chang Kong Meng

Email: [email protected]

Contact: +6 03 3169 4047

Mobile No: +6 012 5123 813

This document contains certain forward-looking statements with respect to Westports Holdings Berhad’s (“Westports”) financial condition, results of

operations and business, and management’s strategy, plans and objectives for Westports. These statements include, without limitation, those that express

forecasts, expectations and projections such as forecasts, expectations and projections in relation to new products and services, revenue, profit, cash flow,

operational metrics etc. These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance

and are subject to risks, uncertainties and other factors, some of which are beyond Westports’ control, are difficult to predict and could cause actual results to

differ materially from those expressed or implied or forecast in the forward-looking statements. All forward-looking statements in this presentation are based

on information known to Westports on the date hereof. Westports undertakes no obligation publicly to update or revise any forward-looking statements,

whether as a result of new information, future events or otherwise. This presentation has been prepared by Westports. The information in this presentation,

including forward-looking statements, has not been independently verified. Without limiting any of the foregoing in this disclaimer, no representation or

warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of such information. Westports and

its subsidiaries, affiliates, representatives and advisers shall have no liability whatsoever (whether in negligence or otherwise) for any loss, damage, costs or

expenses howsoever arising out of or in connection with this presentation.

Documents

Westports Holdings Berhad Corporate Presentationapp.pmgasia.com/InvestAsean2018/pdf/MY Westports... · Corporate Overview 2 Company Snapshot Revenue Track Record (RM million) Commencement