The Tribune

By NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

THE NASSAU Container Port’s operator yesterday warned investors not to “automatically” expect a repeat of last year’s 13.2 percent net income jump in 2027 although its $14.85m profits are “a sound starting point” for gauging likely performance.

Dion Bethell, president and chief financial officer of BISX-listed Arawak Port Development Company (APD), told Tribune Business that it expects “modest growth” in cargo volume during the 12 months to end-June next year after suffering no impact from soaring fuel prices during the latter half of its 2026 financial period.

He revealed that the New Providence’s main commercial shipping port saw shipping container volumes, as measured by twenty-foot equivalent units (TEUs), hit 78,505 for the year to end-June 2026, placing it ahead of prior year and budget forecasts by 7.4 percent and 7.5 percent, respectively.

Mr Bethell also disclosed that APD’s other cargo types, namely vehicle imports and bulk aggregates, also fared relatively well with the latter’s 417,947 tons for the year exceeding the prior year volume by almost 21,000 tons and beating forecasts by 11.5 percent. Auto imports were slightly up against both the container port’s 2026 forecast and its 2025 performance.

APD also elected to “absorb” the increase in its own fuel costs during its 2026 financial year rather than impose a fuel surcharge on its shipping customers, which could have resulted in higher import costs and generated further cost of living pressures for already-struggling Bahamian families.

Responding to this newspaper’s questions following a year in which APD’s double-digit bottom line growth outpaced its $2.69m, or 7 percent, revenue growth to $41.25m, Mr Bethell affirmed that the BISX-listed port operator’s profit margins also rose from 34 percent in 2025 to 36 percent for the year to end-June 2026.

Now, with the first quarter of APD’s 2027 financial year completed, Mr Bethell said it expects cargo volumes to remain stable and support revenue levels, with the prior year’s $14.85m profit providing a baseline to measure its progress. He cautioned, though, that a bottom line jump similar to 2026 should not be assumed by shareholders or the wider Bahamian capital markets.

“We expect cargo activity to remain relatively stable, with modest growth during financial year 2027,” the APD chief revealed. “We anticipate continued growth across our principal cargo categories, supported by ongoing economic and construction activity. That is our operating outlook, rather than a commitment that every category will grow at the same rate. 

“For financial performance, continued cargo growth would support revenue, but the earnings outcome will also depend on the mix of cargo and services, operating costs, maintenance requirements and our ability to manage expenditure. The 2026 result provides a sound starting point, but the 13.2 percent increase in net income should not be assumed to repeat automatically in financial year 2027.

“Global economic conditions, shipping costs and other external factors remain important considerations. Although we did not observe an overall contraction in 2026 cargo volumes, changes in those conditions could affect import activity during the coming year. We will continue to monitor volumes, operating costs and liquidity closely.”

APD’s 2026 profits increased by $1.73m year-over-year, rising from $13.11m in 2025 to $14.85m. They were aided by a 7.4 percent surge in earnings before interest, depreciation and amortisation (EBIDA), which rose by $1.48m from $19.98m to $21.46m for the 12 months to end-June 2026. Operating expenses, meanwhile, rose at a slightly slower pace of 6.5 percent, rising by $1.21m to go from $18.58m to $19.79m.

“Net income grew faster than revenue, and the net income margin increased to approximately 36 percent from 34 percent,” Mr Bethell told Tribune Business. “Lower depreciation and amortisation of $180,611, and lower net finance costs of $74,356, also contributed to the earnings improvement.”

APD’s operating expenses for the 2026 financial year were higher than the company had predicted, though, coming in some $2.06m or 11.6 percent ahead of internal budgets at $19.79m as opposed to $17.73m. However, this was offset by revenues, EBIDA and profitability all outperforming expectations.

The commercial shipping port operator’s top-line “exceeded” projections by $4.23m or 11.4 percent, coming in at $41.25m as opposed to $37.02m, while EBIDA was ahead by $2.17m or 11.2 percent at $21.46m compared to $19.29m. Profits beat expectations by 17.7 percent or $2.23m, finishing at $14.85m compared to $12.61m.

Mr Bethell attributed “increased cargo activity” to APD’s year-over-year results improvement, adding: “The result reflects stronger revenue and earnings alongside a higher level of expenditure, rather than lower costs across the business….

“Container throughput reached 78,505 TEUs in financial year 2026, compared with 73,084 TEUs in financial year 2025, an increase of 5,421 TEUs or 7.4 percent. Against the 2026 financial year budget of 73,000 TEUs, throughput was higher by 5,505 TEUs or 7.5 percent.” 

As for non-container cargos, APD processed some 19,431 vehicle imports during the 12 months to end-June 2026, representing a modest 132 unit or 0.7 percent rise on the prior year’s 19,299. This volume “exceeded the budget” target of 19,000 autos by 431 units or 2.3 percent, signalling that demand for vehicles remains stable and there has been no contraction in the Bahamian economy.

Bulk tonnage imports also expanded by 5 percent, or 20,888 tons, to grow from 417,947 tons in 2025 to 428,835 for the 12 months to end-June 2026. The outcome was also higher when compared to APD’s own internal forecast of 393,500 tons, representing a 45,335-ton or 11.5 percent year-over-year increase.

“Bulk throughput expanded more noticeably, while vehicle volumes remained relatively steady,” Mr Bethell added. He said APD had experienced no impact from soaring global fuel prices on its cargo volumes, adding that the effects were more noticeable in own internal operations.

“Our own operations have experienced increased fuel costs, and those pressures form part of the operating environment we continue to monitor. We did not introduce a fuel surcharge to our customers to account for any increase in fuel cost; APD made a decision to absorb the increase in fuel prices in its operating costs,” Mr Bethell told Tribune Business.

“Nevertheless, we did not see an overall contraction in annual cargo activity in financial year 2026. Container volumes, vehicles and bulk tonnage all increased on the comparisons above. Accordingly, our throughput experience does not indicate an overall volume decline attributable to higher fuel or freight costs during the year. 

“That observation should not be interpreted as evidence that higher transport costs have no effect on individual businesses. Port volumes alone cannot isolate the impact of fuel prices from other demand factors, and our operating data should not be presented as a quantified assessment of changes in carriers’ freight rates.”

Mr Bethell said upward pressures on operating expenses and costs stemmed largely from increases in terminal handling fees, plus utilities and lease payments due to the Government, which owns 40 percent of APD’s equity.

“The principal upward pressures included terminal handling costs, which increased by approximately $1.09m or 19.6 percent; utilities, up $330,260 or 25 percent; Government lease expense, up $289,035 or 24.9 percent; and legal and other professional fees, up $158,087 or 28.9 percent,” Mr Bethell said.

“Higher handling activity generates costs as well as revenue, so the increase in terminal handling fees should not be viewed as an equivalent increase in profit. The prior year comparison also included a $632,998 obsolete inventory write-down related to the older cranes that were retired, with no corresponding charge in 2026. Excluding only that prior year item, operating expenses increased by approximately 10.3 percent.

“Salaries, employee benefits and training were effectively unchanged at approximately $5.49m. Repairs and maintenance declined by $45,275, or 3.6 percent; insurance by $24,891, or 5.7 percent; and other operating expenses by $127,154, or 29.1 percent,” Mr Bethell added.

“We maintained a disciplined approach to managing controllable expenditure. This included scrutiny of discretionary spending, preventative maintenance, procurement management, technology and process improvements, and close monitoring of staffing and other controllable costs despite higher business activity.”