WPRTS: Port Operator Exceeds Expectations on Robust Volumes and Cost Control

A prominent port operator has delivered a strong financial performance for its fiscal year 2025 (FY25), with core profit after tax and minority interests (PATAMI) aligning closely with market expectations and showing a significant year-on-year increase. The positive results were underpinned by robust throughput volumes and effective cost management, prompting its investment bank, RHB Investment Bank, to reiterate a “Buy” recommendation with a maintained target price.

Performance Review

For FY25, the operator reported a core PATAMI of MYR1 billion, marking a 12.2% increase from the previous year, effectively meeting 103% of both the investment bank’s and the Street’s full-year estimates. Total operational revenue for FY25 reached MYR2.5 billion, up 11.6% year-on-year, driven by record-high throughput. In the fourth quarter of 2025 alone, operational revenue rose 10.7% year-on-year to MYR680 million, contributing to core earnings of MYR284 million, a 6.9% year-on-year improvement. Throughput for FY25 stood at 11.3 million twenty-foot equivalent units (TEUs), representing a 3.3% year-on-year growth and meeting 100% of the full-year estimate.

Key Growth Drivers and Efficiency Gains

The strong financial performance was largely propelled by a significant 7.4% year-on-year increase in transhipment volumes, reflecting broader economic growth. This was further bolstered by a 15% tariff uplift adjustment. The operator also demonstrated effective cost management, with operational expenses benefiting from lower electricity charges due to Regulatory Period 4 and increased solar installations, as well as a strengthening Malaysian Ringgit which helped mitigate fuel costs.

Navigating Challenges and Future Trajectory

Despite the overall positive trend, the operator faced a 1.8% year-on-year dip in gateway volumes, primarily due to restrictions on unauthorised inbound waste products. However, transitory congestion issues experienced in late 2025 and early 2026 have been fully resolved, with yard utilisation now stabilising at a healthy 70%. Looking ahead, the loss related to inbound waste products (approximately 200,000 TEUs) has largely been accounted for by the end of calendar year 2025. While no significant recovery in Suez Canal transits is expected in the first half of 2026, the operator anticipates no immediate headwinds for cargo volumes.

Analyst View and Recommendation

RHB Investment Bank maintains a robust outlook for the operator’s earnings trajectory, projecting a 10% tariff increase in January 2026 and a 4.5% throughput growth forecast for FY26, aligning with national GDP projections. Growth is expected to be balanced across both gateway and transhipment segments. Consequently, RHB has reiterated its “Buy” rating for the stock, with a maintained DCF-based target price of MYR6.89, representing a 13% upside from its current market price.