KUALA LUMPUR: Westports Holdings Bhd port congestion has not yet eased since some countries are still under lockdown measures, with New Zealand being the latest that imposed lockdown apart from Bangladesh and Vietnam.
Westports' current yard utilisation is at 95-99 per cent, which caused a bottleneck at the port.
Hong Leong Investment Bank (HLIB) Research noted that Westports' expects the supply chain disruption to likely linger for at least one to two years as some countries may still impose lockdowns if the resurgence of cases happens.
Westports had previously shared that October volume is still trending the same as the third quarter (Q3) volume with a decline of 10 per cent year-on-year.
HLIB expects the fourth quarter (Q4) to be a flattish quarter-on-quarter from the yard congestion, which affected volume.
Moving on to earnings, Westports' Q3 net profit of RM179 million were slightly above HLIB's expectations at 80 per cent for higher value-added services (VAS) but within consensus at 75 per cent.
In a note today, HLIB said Westport's total revenue remained flattish at -0.6 per cent despite lower container throughput mainly due to VAS.
"The lower container volume was due to lower gateway volume at -18.4 per cent reflected by domestic lockdown as well as lower transhipment volume which was lower 6.3 per cent from the yard congestion and broader supply chain issue.
"Operational cost was higher by 15 per cent owing to higher manpower cost, higher fuel cost and higher electricity cost. In turn, net profit showed a decline by 12.2 per cent," HLIB said.
HLIB has maintained its 'Hold' call on Westports with a higher target price of RM4.70 from RM4.67 previously.