Bintulu Port proposed tariff restructuring, including a 30 per cent hike for non (LNG cargoes at Bintulu Port and a reduction of LNG-tariffs, may not likely be implemented by early next year as predicted.
KUCHING: Bintulu Port Holdings Bhd’s (Bintulu Port) proposed tariff restructuring, including a 30 per cent hike for non liquified natural gas (LNG) cargoes at Bintulu Port and a reduction of LNG-tariffs, may not likely be implemented by early next year as predicted.
AmResearch Sdn Bhd (AmResearch) said if the reduction in LNG tariff rates are implemented, it would be more than offset by increases in the non-LNG cargo rates and the reduction in lease rentals.
“By the financial year 2016 forecast (FY16F), we have assumed an at least 15 per cent decline in LNG tariff, but mitigated by a 43 per cent rise in non-LNG tariffs compared with FY13 numbers,” it said in a note yesterday.
To note, Bintulu Port is asking for tariff hikes of 20 to 30 per cent in containerised and general cargo handling for Bintulu Port.
The tariffs for the new port, Samalaju Port, have also yet to be finalised, simultaneously reducing LNG-tariffs as well, it said.
“Samalaju Port, which can handle 18 million tonnes of cargo, was originally scheduled for completion by next year, but the latest media report suggests that completion has been delayed to the third quarter of 2017 (3Q17).
“Furthermore, our assumption of an additional 2.5 milliontonnes of LNG in FY16F may not be achieved given that the new Train 9 at the Bintulu MLNG complex is likely only to be completed by 3Q16, instead of early 2016,” the research team said, noting that the jetty has yet to be constructed and Train 9 is expected to bring in an additional 3.6 million tonnes of LNG, annually.
On a positive note, AmResearch pointed out that Bintulu Port has already succeeded in getting a RM300 million reduction in land lease rentals at Bintulu Port over the original concession period to 2022.
“It has also earlier been granted an approval in-principle from the federal government to extend the concession period for Bintulu Port to 2052 from 2022.
“This means asset depreciation could be stretched over a long period,” it added.
Overall, the research team maintained a ‘hold’ recommendation on the stock, for a dividend yield of circa four per cent, pending clarity on the implementation of the tariff restructuring.