The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

ARAWAK Port Development Company (APD) was 11 per cent ahead of profit projections for its 2018 first quarter, despite forecasting a near-$3 million decline for the full-year.

The BISX-listed Nassau Container Port (NCP) operator revealed in its annual report that it continues to outperform its internal budget, with revenues, margins and container throughput volumes also ahead of expectations for the three months to end-September 2017.

"Our net income is currently 11 per cent or $211,600 over budget as at September 30, 2017, and we continue to see a steady import of used vehicles from Asia and storage-related income," APD told shareholders in its newly-released report.

"NCP's TEU (twenty-foot equivalent unit) volumes as at September 30, 2017, are tracking 1 per cent over budget. Total revenue as at September 30, 2017, is tracking about 2 per cent over budget."

APD has adopted conservative financial forecasts following a record-setting 157 per cent profit increase in its 2017 financial year, which was aided by the one-off recovery of almost $1.1 million in Baha Mar-related storage fees and rent through the project's construction resumption.

Cargo volumes were also boosted by construction imports related to Hurricane Joaquin and Matthew rebuilding efforts, and bulk vehicle imports that came through the Arawak Cay-based port.

APD is projecting a 26.4 per cent year-over-year profit decline for the 12 months to end-June 2018, with revenues falling 2 per cent in comparison to 20178's $32.551 million. "For the 2018 fiscal year, we are forecasting gross revenue of $31.796 million or 2 per cent less than the prior year's actual gross revenue," APD said. "Net income is projected to be $8.222 million or $2.949 million less than the 2017 actual net income of $11.171 million.

"Total market volumes are expected to remain around 68,500 TEUs for 2018, or 6,500 over the 2017 budgeted volumes of 62,000 TEUs. Our total revenues as at September 30, 2017, are ahead of budget by approximately $185,778 or 2 per cent. Total expenses as at September 30, 2017, were slightly over budget by $10,817."

APD added that it did not anticipate "any significant project volumes during fiscal year 2018", with Baha Mar's construction set for completion by April 2018, even though The Pointe, One Cable Beach, Albany, and the Atlantis and Sandals upgrades are all in motion.

Turning to 2017, the port operator said its total comprehensive income was 121 per cent higher than its own prediction of $5.044 million.

"In the 2017 financial year, APD continued to exceed projections," the annual report said. "Budgeted net income was $5.044 million, while actual net income for 2017 was $11.171 million, which is $6.127 million or 121 per cent more than budget. The company's total revenues for 2017 were $32.551 million, which is $5.472 million or 20 per cent higher than the prior year.

"Our direct operating margin (DOM) for 2017 was 51 per cent (2016: 37 per cent), which was 12 per cent higher than our forecasted DOM of 39 per cent. For the period ended September 30, 2017, our DOM is 43 per cent, which is 1 per cent more than our forecasted DOM for the same period.

"For the year ended June 30, 2017, NCP had processed 70,226 TEUs. This represents a 14 per cent increase in container volumes over 2016 volumes of 61,778 TEUs."

APD said TEU volumes beat forecast by 13 per cent, while bulk vehicle imports of 16,864 were 38 per cent or 4,672 higher than the budgeted figure of 12,192.

"This resulted in revenues of approximately $3.003 million from landing and security fees," the Nassau Container Port operator said.

"Additionally, revenues from storage fees were approximately $1.056 million over budget. This was attributable to the fact that APD was able to recover storage for container units related to the Baha Mar project that were at the port well beyond the free time allowed.

"Total current assets increased from $9.31 million to $17.929 million, an increase of 93 per cent. Cash and cash equivalents increased by $8.141million."

APD said 2017 operating expenses were 8 per cent or $1.742 million lower than forecast, while the port's Bahamas Power & Light (BPL) substation is expected to be completed during the 2018 financial year.

The BISX-listed port operator emphasised its financial strength by revealing that it has $6 million in unused credit facilities, including one with Royal Bank of Canada (RBC) and another with the Inter-American Investment Corporation (IIC).

"Proceeds are to be used to fund/finance a potential expansion of port facilities, the potential introduction of air cargo operations and port energy conservation projects, including but not limited to installation of a Solar PV System, High Mass Lighting, LED retrofit and other related investments in energy conservation/improvements," APD said.

"The proceeds may also be used for the development of LNG storage, handling and operations facilities, and for procurement of energy efficient appliances, vehicles and equipment."