Singapore-headquartered port operator PSA International (PSA) posted a 9.5% year-on-year decline in net profit to US$933.32 million drawn on revenues which fell 6.7%.due to the softening of global trade and demand.
PSA International handled 64.10 million TEU in 2015, resulting in a 2% decline, with its flagship Singapore facilities handling 30.62 million TEU, down 8.7% year-on-year. PSA terminals outside Singapore delivered a total throughput of 33.48 million TEU, increasing 5% year on year.
Moreover, the prolonged lower bunker prices have also challenged Singapore’s status as a premier transshipment hub as container liners preferred direct port sailing services, reducing the need for cargo transshipment at the port of Singapore. Besides, changes in container alliances have reduced the number of vessels calling in Singapore as some alliances have their own preferred ports of call.
Group chairman of PSA , Fock Siew Wah stated “In 2015, the unusual volatility that persisted in the global marketplace caused a general loss of confidence on all fronts” He listed China’s economic slowdown as one of the key factors for the sluggish growth in Asia, which has affected the container shipping sector as well. Other factors include excess tonnage capacity and lower freight rates.
He continued by saying that the container shipping industry was not spared as it grappled with softening trade and demand, excess tonnage capacity and depressed freight rates, despite anticipating and preparing for the “oncoming storm”
So far, PSA is still in good financial health with a strong balance sheet including a gross debt equity ratio of 0.44 times at the close of 2015.