Having battled significant challenges that befall the shipping and logistics industry following the outbreak of the Covid-19 pandemic particularly the shortage of vessels, Namport has emerged resilient further cementing its growth potential going forward.
Backed by audited financial statements for the year ended the 31st of March 2022 which showcase upward mobility in the Authority’s financial fortunes, Namport’s Chief Executive Officer, Andrew Kanime last week affirmed that the very challenging times had also provided an opportunity for the business to show its resilience, to innovate and importantly, to ingeniously make most and the best with as little as possible.
“We went out across the country and into the region to harness all the volumes we could and in collaboration with, and the support of, our valued customers, jointly worked on workaround ways to bridge the shipping and container shortages. We introduced incentives for alternative shipping container configurations and had bulk vessels carrying cargo which was previously predominantly handled in containerised form.
“Given the very constrained financial resources and revenues, we embarked on strict austerity measures across all elements of our costs, and this bore significant fruit with material savings being realised in our overall operational expenditure. Our marketing initiatives also continued to give positive returns, with volumes starting to flow from new markets and customers locally and in the region. Hence, the Authority continued to weather the storm, with financial and operational performance for the year outstripping previous financial year’s performance,” Kanime said.
One of the significant challenges to befall the shipping and logistics industry following the outbreak of the Covid-19 pandemic was the shortage of vessels especially on the relatively less lucrative Africa trade lanes and in favour of the highly profitable Asia – Pacific trade lanes.
“So dire was the situation that in numerous instances, our ports at Walvis Bay and Luderitz, just like others here in Africa, went on for weeks without receiving a single vessel call especially for container carriers,” Kanime said adding that a critical consideration for importers and exporters when they select the logistics options and ports of preference is the time of getting produce to market or inputs from source to point of production.
“Therefore, the shortage of vessels had a severe impact in that it prolonged the times cargo took to reach intended destinations and port users had no option but to seek for alternative ports where the challenge of vessel was not so acute. This was regrettably to our detriment, and we lost quite some cargo volumes to other ports in the region as a result.”
Business Express understands that this imbalance in the global availability and distribution of shipping capacity subsists until today albeit showing signs of beginning to even out.
Positive financials
Withstanding the challenges, Kanime has highlighted that the resilience and agile effort of the Authority has been successful with financial results for the year ended March 31 showcase a wide array of positives thereby cementing credential for a sustainable entity going in this post-covid era.
Among the key numbers released by Kanime on Friday, volumes of containerised and non-containerized or bulk cargo increased year on year by eight per cent (8%) and nine per cent (9%), respectively. Equally, cross-border volumes increased by 10% to 1,606,984 tonnes (2021: 1,464,100 tonnes) representing 24% of total cargo volumes handled.
The total corridor volumes comprised 550,113 tonnes destined for the hinterland and 1,056,872 tonnes from the hinterland. The overall vessel gross tonnage increased by 3.4 million tonnes or 21.6%.
“The increase in vessel calls was mainly due to the increase in petroleum, research, dry bulk, roll-on-roll-off, foreign tugs, and foreign fishing vessels,” Kanime justified further stating that revenue for that same reporting period amounted to N$1.23 billion, up from N$1.11 billion in the previous financial year and representing an increase of eleven per cent (11%).
Conversely, Namport’s operational expenditure remained flat, having only increased by a nominal zero comma one per cent (0.1%) year on year from N$1.005 billion in the preceding financial year to N$1.006 billion for the year ended 31st of March 2022. Operating profit for the year increased from N$121 million to N$374 million and excluding the non-operational income of N$147 million, the year-on-year increase in operational profitability amounts to eighty-eight per cent (88%).
“In the year ended the 31st of March 2021, the Authority made an operating loss before tax and this was largely because of the high debt service cost on the funding secured for the New Container Terminal construction which had previously been capitalised until project completion in 2020.
“However, with the significant improvement in operational performance, the Authority could comfortably cater for these finance costs and maintain a positive bottom line. Hence, profit before taxation for the year amounted to N$253 million (and N$106 million excluding non-operational income), in comparison to the loss before tax position of N$38 million for the year ended the 31st of March 2022,” Kanime noted.
He also spoke about rebuilding cash reserves which had almost been depleted following the extensive capital expenditure on the container terminal and the concurrent servicing of the loan during the period of construction.
“Augmented by the positive financial performance, cash and cash equivalents held as at the 31st of March 2022 amounted N$227 million, up from N$85 million at the end of the previous year. During the year under review, a total of N$479 million was paid towards capital expenditure and debt service obligations,” explained Kanime.
So overall, we are humbled and encouraged by the significant improvement in our financial performance and financial standing and it is our goal to sustain this into the future for the long-term benefit of our shareholder and the Namibian nation.
New growth dimension
With a strong financial showing in the most recent fianancial year, Kanime also announced the preferred bidder for the concession of the new container terminal – Terminal Investment Limited.
This is a company based in Geneva, Switzerland and its majority shareholder is, the Mediterranean Shipping Company or MSC, the largest shipping line in the world by container capacity. Terminal Investment Limited or has interest in more than sixty terminals, handles at least 60 million TEU’s per annum and operates in thirty one countries across five continents.
“The next stage of the process will be to commence with negotiations between Namport and TIL on the Concession Agreement, focusing on the detailed operational matters, including but not limited to the exact terms and conditions of the personnel to be taken over by the operator.
“This will culminate in the formal award of the concession, the signing of the Concession Agreement and the handover of the cargo handling operations to the private operator or concessionaire. We envisage to finalise the negotiation and handover process by the first quarter of 2023,” noted Kanime who further emphasised that all objectives of the concession exercise such as increase in cargo volumes, investment commitment and employment guarantees will be solidified in the Concession Agreement with penalties set for the non-attainment of the set and agreed performance and volume targets.
“We are pleased with the financial performance of the business for the year ended the 31st of March 2022 and are confident that the upcoming concession places us on a strong path to achieving our ultimate goal to generate the best value for our shareholder and to be the best performing seaports in Africa,” concluded Kanime.