Still optimistic despite another extension for Bintulu Port ops
KUCHING (Jan 5): Bintulu Port Holdings Bhd (BiPort) announced that its wholly-owned subsidiary Bintulu Port Sdn Bhd (BPSB) has entered into its third Interim Agreement (IA) with the Ministry of Transport and the Bintulu Port Authority which grants the former rights to operate Bintulu Port over the next 12 months.
This follows the second interim agreement which ended on December 31, 2024. Recall that the IA is to facilitate the transfer of regulatory powers over Bintulu Port to the Sarawak government.
“We are optimistic about long-overdue revision of Bintulu Port’s tariffs, with general cargo tariffs last adjusted in 1983 and container tariffs in 1999,” commented AmInvestment Bank Bhd (AmInvestment Bank).
“Although we believe the takeover of Bintulu Port by Sarawak state will raise the prospects for the tariff hike, we expect the tariff hike to be implemented only after the establishment of a centralised port authority, which may take one to two years.
“The establishment of a central port authority aims to harmonise port/vessel dues and other fees for users to benefit from consistent services and charges within Sarawak ports.”
The completion of the entire exercise will involve the centralisation of the port authority into Bintulu Port Authority Sarawak; and finalisation of the port operator agreement (POA) between the Sarawak government, the port authority and BPSB which is currently ongoing, according to management.
Despite being hopeful, the research team did not discount the process taking longer than expected as centralisation of the port authority has yet to be announced.
“The new POA is expected to be accompanied (or followed shortly) by a 10 per cent hike in tariff for Bintulu Port, which is a key rerating factor for the Group as it has not seen any revision since 1993.”
For reference, the tariff charged at Bintulu Port is currently RM207.50 per twenty-foot equivalent unit (TEU) for local containers or 38 per cent below the level charged at Samalaju Industrial Port.
AmInvestment Bank’s sensitivity analysis showed that a 10 per cent hike this year will result in a material 6.4 per cent increase in group financial year 2025 core net profit (CNP).
Exports of liquefied natural gas (LNG) from BiPort are expected to plateau at 25 to 27 million metric tonnes (MT), as there are no plans for plant expansions. This translates to a utilisation rate of 85 to 90 per cent of the nominal Malaysian LNG capacity of 29.3 million MT per annum.
Despite this, LNG exports are still healthy following an increase in exploration activities.
“Petronas and its petroleum arrangement contractors (PACs) recorded a total of 10 hydrocarbon discoveries in Malaysia in 2022, of which were discoveries made off the coast of Sarawak.”
Meanwhile, higher non-LNG segment earnings are expected to drive BiPort’s growth moving forward.
Non-LNG segment is expected to make up 48 per cent of revenue share in FY25, bolstered by higher throughput from Wenan Steel and Ocikumho, Ocikumho/Wenan Steel is envisaged to commence production in 2QFY25/3QFY25.
-Agency
