The Limassol, Cyprus-based port terminal operator posted a net loss of $53 million compared with a $61 million profit in 2016, despite rising volumes and relatively steady revenues, according to the firm’s most recent financial statements.
Terminal operator Global Ports posted a net loss of $53 million in 2017 compared with a $61 million profit the year before.
Terminal operator Global Ports Investments PLC posted a net loss of $53 million for the 2017 calendar year compared with a $61 million profit the year before, according to the company’s most recent financial statements.
The Limassol, Cyprus-based firm, which is part owned by Maersk Group subsidiary APM Terminals, sank into the red despite an increase in total volumes and relatively steady revenues due to the recycling of bad loans acquired in its purchase of fellow terminal operator NCC Group Ltd. in 2013.
Global Ports’ marine terminals, located primarily in Russia and Finland, handled 1.21 million TEUs of containerized cargo and 2.69 million metric tons of bulk cargo during the year, increases of 6.8 percent and 21.9 percent, respectively, from 2016.
The company attributed the growth in terminal throughput primarily to a “revival” in Russian imports caused by increased consumer demand, as well as an uptick in the containerization of exports.
In an effort to gain market share, Global Ports in 2017 introduced Russian rouble-based pricing for services offered to Russian freight forwarders and cargo owners that resulted in an 11.5 percent decline in consolidated revenue per TEU and a 5.5 percent dip in container handling revenues to $254.8 million. Those losses were offset in part by the abovementioned increase in container handling volumes.
Total revenues at the company slipped 0.3 percent year-over-year to $330.5 million during 2017.
“The recovery in the Russian container market continues to gain momentum with December volumes at their highest levels since 2014 and with 2018 starting healthily,” Global Ports Management CEO Mikhail Loganov, said of the results. “The combination of acceleration in our container volumes, strong growth in bulk cargo throughput, and strict cost control resulted in increased Adjusted EBITDA and an expansion of Adjusted EBITDA Margin for the Group in the second half of the year.
“Balance sheet discipline continues to be critical for Global Ports and we remain highly focused on deleveraging,” he said. “We reduced our net debt by another USD 81.4 million in 2017 and since the NCC acquisition, the group’s total debt position has been reduced by almost half a billion US dollars.”
In the short term, Loganov said the company would continue with its commercial efforts aimed at securing additional market share and growing terminal volumes.
“Although we currently anticipate that this may result in a single digit decline in our revenue per TEU over the current year, this approach is gaining strong traction as our volume growth in the first two months of the year has outpaced the current level of market growth,” he said. “Looking forward, we are well placed to benefit from the continued expansion of Russia’s undercontainerized market, supported by real wages growth and recovery in consumer sentiment.”