Muscat: Salalah port has said its container terminal has handled 1.628 million twenty-foot equivalent units (TEUs), a seven per cent decline from 1.753 million TEU throughput achieved in the first half of last year.
The decline in container activity is due to lower volumes from some of the existing liner customers in addition to delay in new businesses materialising. "The port commercial teams continue to endeavour growing volumes from existing customers and attract routes through Salalah to a number of new destinations," Salalah Port Services said in its first half result.
General container terminal (GCT) has handled 5.466 million tonnes of general cargo in the first half of 2014, an overall volume increase of 28 per cent over the same period last year, where major commodities of trade include limestone, gypsum, methanol and cement exported from Salalah to nearby markets.
The increase of export volumes of major customers is a reflection of the value that the port plays in helping local businesses connect to global markets.
Consolidated revenue for the first half of 2014 was at OMR28.22 million, a decline of 3 per cent compared to same period last year. Consolidated earnings before income tax, depreciation and amortisation (Ebitda) was recorded at OMR8.74 million, resulting in an earnings margin of 31 per cent against 33 per cent in the first half of 2013.
World's top port
The fall is mainly due to lower container terminal volumes and inflationary impact on costs.
Net financing cost has reduced by 11 per cent over the first half of 2013 due payment of regular loan instalments. The consolidated net profit was recorded at OMR3.18 million, a 19 per cent fall compared to the same period of last year.
Port of Salalah is among the world's top transshipment ports and continues to provide an important service to the global supply chain. Due to the port's connectivity, which features time and cost advantages, it provides a significant opportunity for businesses to benefit from the Salalah hub network of multi-modal transport (sea-air-road) and Salalah Free Zone incentives.
The company is also working in partnership with Salalah Free Zone to attract investment that would improve the import and export value for the country.
There is continued concern with slow progress on the development of industrial activity in Salalah, which has an impact on the local trade volumes, and on shipping lines calling Salalah.
One of the strategic aims of the Port of Salalah is to encourage companies to add value to imported bulk and break bulk products to generate additional re-export business for the container terminal and general cargo terminal. Recently port handled higher exports of gypsum and limestone due to enhanced mining activities in the region.
"We therefore expect a positive future for the GCT and look forward to the completion of the expansion of the new dry bulk and liquid jetty towards end of the year," said the company.
Salalah Port Services has renewed its terminal services agreement with Maersk, which has been an integral customer to the port since the start of operations in November 1998, and continues to be one of the leading business customers in the company's growth.
Competition is growing in the region with new port capacities emerging.
Profitability, capacity and market share are the fundamentals which the company continuously manages between risk and opportunity.