The Drewry Port Equity Index continued to rise in 2Q24, gaining 3.1%, following a 1.6% increase in 1Q24, but the growth rate slowed QTD, with a modest rise of 0.6%. Overall, the index was up 5.5% YTD (ending 31 July 2024), trailing significantly behind the 15.8% increase of the S&P 500. Within the sector, Global Terminal Operators (GTOs) rose 6.9% YTD, while Regional Terminal Operators (RTOs) improved 2.4%.

It is important to note that we have included AD Ports in the Drewry Port Equity Index from June 2024, bringing the total number of index constituents to ten ports and terminal operators. Therefore, the figures presented here are not directly comparable to those in our previous editions.

From a valuation perspective, the EV/EBITDA multiple increased to 9.1x in 2023 (up from 8.8x in 2022), reflecting a slower pace of equity valuation growth amid the normalisation of storage revenue and restrictive monetary policy. However, by the end of 1H24, the EV/EBITDA ratio improved to 10.9x. At the current level, the sector is at a slight discount of 1.5% compared to the index’s long-term (10-year) historical average of 11.0x.

At the time of publishing this report, only three companies had released their volume figures and two had provided detailed 1H24 numbers. Overall, the throughput of sampled companies grew 7.4% with GTOs and RTOs volumes rising 7.8% and 4.5%, respectively.

In 2Q24, sampled GTOs showed strong growth: Cosco Shipping Ports’ total throughput increased 7.9% to 54.0 mteu and that of CM Ports rose 7.7% to 71.6 mteu.

RTOs also performed well but at a slower pace. For HPHT’s Port Logistics division, gross throughput grew 4.0% to 10.4 mteu, while Westports saw a 3.1% increase to 5.4 mteu. Notably, Santos Brasil experienced a 27.5% surge in gross throughput to 0.7 mteu.

HPHT’s consolidated revenue increased 2.6% YoY to HKD 5.3bn (USD 680mn) in 2Q24, less than the 4.0% volume increase, resulting in a lower average revenue per teu. Adjusted EBITDA rose 7.5% YoY to HKD 3.2bn (USD 411.6mn), with a margin increase to 60.5%.

Westports’ consolidated container revenue grew 6.6% to MYR 482mn (USD 101.9mn), benefiting from a favourable volume mix. Container revenue per teu rose 5% to MYR 176.7 (USD 37.3), while adjusted EBITDA increased 7.9% to MYR 340.3mn (USD 71.9mn), expanding the margin to 61.5%.
Source: Drewry Maritime Financial Research