Amsterdam Preso 2009 Final
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Transcript of Amsterdam Preso 2009 Final
Port FinanceAmsterdam
Fighting Recession with a Diversified Portfolio
Richard Szuflak
www.euroports.com
2
Introduction
The purpose of this paper is to assess the impact of the current
economic recession on volumes at European ports;
We will look at different ports and trades and try to see if some have
been impacted more than others;
And we will try to discuss a conclusion – if there is one…
Three small points before starting:
• This is not a scientific work. This presentation aims at providing trends
rather than detailed analysis;
• Finding meaningful and coherent statistics is sometimes a challenge;
• Obviously transhipment hubs and gateway ports do not treat the same kind
of volumes however in this work we compare ports between themselves
irrespective of their main businesses, traffic line or dependence on key
industries.
3
Purpose of the paper
The economic recession affects all businesses;
Port operations, like any other segments of the economy, have been
hurt;
In today’s presentation, we will try to see how ports have been affected;
Are the effects been different for different ports?
Is there a resilient model?
4
The Basics
GDP growth always has been a proxy for seaborne traffic
and port handling;
Everyone here has seen this graph showing that world
seaborne trade is growing faster than world GDP;
Seaborne Trade Grow
Faster than GDP
5
GDP is going down
When GDP is down, what effect this has on port traffic?
Source: Eurostat 15 may 2009 (Euro Area and EU)Source: IMF April 2009
6
Economic Production is going down too
Source: Eurostat 13 May 2009
Total Traffic in some of the largest European ports
7
All ports claimed to have had a strong first half of 2008;
Followed by a slower second half – ie after the summer and increasingly
towards the year end;
However most ports have recorded a positive growth in 2008;
That was on top of an average growth of 5% in 2007 for those ports;
All cargo Containers RORO
Ports 2007 2008 % H2/H1 2008 H2/H1 2008 H2/H1 2008
Rotterdam 407 421 +3.5% -2.5% -1.4% -4.9%
Antwerp 183 189 +3.5% -3.2% -4.6% -8.9%
Hamburg 140 140 -0.0% -2.3% -2.3% n/a
Marseilles 96 96 -0.0%
Amsterdam 88 95 +7.9%
Le Havre 79 80 +1.6%
Algeciras 75 70 -6.6%
Bremen 69 75 +7.9%
Top 8 1 137 1 166 +2.6%
Volume in mtons
Ranking based on Total Traffic at each port
H2 2008 witnessed
the start of a slow
down. Container
and RORO trades
were hit the most.
8
In Q1 09 the trend accelerated somewhat
95.0
41.8
29.423.4
18.0
94.0
37.3
27.320.9 19.3
01020304050
60708090
100
R otterdam Antwerp Hamburg Marseilles Amsterdam
Q 1 08 Q 1 09In million tons
-10%-1% -10%-7% +7%
9
We turn our attention on Container Trade
Top 10 container ports in Europe is shown below;
The 2007 growth for those 10 ports was +13%
2008 still posted a gain;
But that was a strong deceleration against 2007;
PORT 2007 2008 %
Rotterdam 10.8 10.8 -0.2%
Hamburg 9.9 9.7 -1.9%
Antwerp 8.2 8.7 +6.0%
Bremen 4.9 5.5 +12.0%
Gioia Tauro 3.4 3.4 +1.5%
Algeciras 3.4 3.4 -0.3%
Felixtowe 3.3 3.2 -3.0%
Valencia 3.0 3.6 +18.3%
Le Havre 2.6 2.5 -5.4%
Barcelona 2.6 3.6 +36.4%
Top 10 52.1 54.3 +4.2%
Volume in mteus 2,590
1,955
2,738
2,030
2,250
1,700
0
500
1,000
1,500
2,000
2,500
3,000
R otterdam Antwerp
Q 1 07 Q 1 08 Q 1 09
-18% -16%
Q1 09 vs Q1 08 showed tremendous
slowdown at the top two ports.
10
This is a Global Trend
7.21
6.27
2.07
2.77
2.13
6.97
5.62
2.082.56
1.93
6.02
4.6
1.742.3
1.53
0
1
2
3
4
5
6
7
8
S ingapore Hong-K ong Antwerp R otterdam L os Angeles
Q 4 07 Q 4 08 Q 1 09In million TEU
11
Further Comments
Not all ports are equals:
some have posted gains in Q1 09 like Valencia (+6.5%)
some have limited the downturn like Genoa (-3.7%)
Some have been awfully affected like Barcelona (-28%)
To navigate through the storm, many ports have decided to freeze port
charges and dues
In some cases, those charges will even be reduced;
For Q1 2009, a decrease of 15 to 20% of container trade seems more or
less the average.
12
What About Dry Bulk Trade in Europe?
Some of the largest bulk ports in Europe is shown
below;
The 2007 growth for the top 10 ports was +13%
However 2008 saw (again) a strong decline;
Q1 2009 vs Q1 2008 for the top two ports resulted in a
dramatic decrease!
PORT 2007 2008 %
Rotterdam 90.6 94.9 +4.7%
Amsterdam 51.2 50.8 -0.8%
Hamburg 30.0 26.8 -10.5%
Dunkirk 27.6 26.8 -2.7%
Antwerp 24.5 27.3 +11.6%
Taranto 22.0 21.8 -1.0%
Gijon 18.3 16.9 -7.8%
Ghent 17.1 18.0 +5.3%
Top 8 281.2 283.3 +0.7%
Constanza and Immingham are missing in this list
Volume in mtons
19,845
6,630
15,249
3,950
0
5,000
10,000
15,000
20,000
25,000
R otterdam Antwerp
Q 1 08 Q 1 09
-23% -40%
13
Further Comments
Main bulk ports traditionally serve power stations and steel mills;
A smaller fraction goes into the agriculture industries (agribulk, grain,
fertilisers);
A combination of huge decrease in European steel production, halt of
construction industry as well as less coal imports have hit bulk trade very
hard;
This is of course linked with electricity consumption, automotive and
constructions industries;
Q1 2009 shows a decrease of 20 to 30% on average;
In theory, bulk trade should indicate the restart of the economy.
Baltic Freight Index is seen more and more by analysts as a proxy to
estimate the state of the world economy.
Heavy Bulk impacted more than containers because of steel production sharp decrease
Container trade experienced a decrease, on average, by 15-20% for
a number of ports in Europe;
Bulk trades have been impacted too, but we have two categories
here:
• Ports with a strong reliance on imports for steel plants have been
very affected:
– Marseilles: -51% and Dunkirk: -33% but -67% for ores
– Taranto: -52%
– All Spanish ports: -30%
- Ports with a larger hinterland or larger product-mix
– Amsterdam: -7%
– Rotterdam: -23% (but -55% for ores and + 23% coal)
If ports with a better cargo mix are doing better, is it then possible to
look if ‘generalist’ ports have done better than others?
15
How ‘Generalist Ports’ have traded?
We will now turn our attention to generalist ports: what are generalist
ports?
Generalist ports have a ‘balanced’ flow of traffics between dry bulk, liquid
bulk, general cargo and containers and with no strong dominant cargo
line;
The method is a bit ‘empiric’ – so forgive me for my choice - but the idea
is to select ports having a relatively balanced flow between different
cargo – and no steel plant around…
We have selected 4 ‘candidates’:PORT Bulk Liquid Containers
and GC
Zeeland ports 39% 36% 26%
Valencia 18% 6% 76%
Rouen 47% 40% 13%
Rostock 17% 22% 61%
Proportion of traffics in % (2008)
16
This small sample shows inconsistent results but yet the fall in traffic seems less significant than other ports
PORT 2007 2008 %
Zeeland ports 33.4 33.6 +0.6%
Valencia 53.3 58.7 +10.1%
Rouen 22.2 22.7 +2.3%
Rostock 26.5 27.3 +3.0%
Top 10 135.4 142.3 +5.1%
Volume in mtons
-12% -16%
Rostock Zeeland Valencia Rouen
+4% excepted grain exports
-3% +12%*
Performance Q1 09 vs Q1 08
17
To Sum-up
2008 vs 2007 Q1 09 vs Q1 08
(average)
Sample of Top 8 European ports (all cargo): +2.6% +5% to -15%
Sample of Top 8 Container ports: +4.2% - 15% to -20%
Sample of Top 8 Dry Bulk ports: +0.7% -20% to -40%
Sample of 4 generalist ports: +5.1% +10% to -15%
18
Is there a winning model?
Ports are very diverse and it is hard to see anything else than common
sense;
Container trade is down and seems to go down 3X faster than GDP;
Bulk trade (specifically heavy bulk like coal and iron ore) has been
hammered by the production shutdowns in steel plants;
Bulk ports with a more diverse cargo exposure or servicing a large
hinterland are holding better than ports solely exposed to the steel
industry;
Although our sample is very small, generalist ports seems to hold a bit
better – but this should be tested on a greater sample.
Basically, this is a validation of the old saying: don’t put all your eggs in
the same basket!
19
History Shows…that there is hope!
During past recessionary
periods growth reduced for
periods of 1-2 years;
In the recessions of the early
1980s and early 2000, world
maritime growth was
reduced/flat or negative;
However this recession seems
considerably worse.
Following a recession a strong
rebound in growth experienced
re-capturing the long-term trend
once the recessionary period
was over;
It has to be seen if it will be the
case again;
Strong
Rebound
2009?
2010?
2011?
A few words on Euroports
www.euroports.com
21
EUROPORTS is a diversified port operator with capabilities across all cargo segments.
Industrial
Operations
12%
General Cargo &
Roro
26%
Containers
9%
Bulk Liquids
6%
Minor Bulk
26%
Heavy Bulk
21%
22
Rauma
Varna
EUROPORTS is Built Along 3 Main Freight Corridors
23
How did Euroports go through the storm?
Euroports is a recently formed company which has aggregated port
companies with long presence in port operations (sometimes 100 years in
business);
Across a very long horizon, we would see that Euroports’s companies
have regularly increased its volumes over the years (+2.5% per year);
Losses across the portfolio are always recovered by cargo gains in
another facilities or sectors;
Cargo Split Euroports Excl. Industrial Activities, China
and RORO
0
10,000
20,000
30,000
40,000
50,000
60,000
2000 2001 2002 2003 2004 2005 2006 2007 2008
Heavy Bulk Minor Bulk GC and Containers Liquids
The impact of the current recession is
limited at an annual volume decrease of
10% across the portfolio.
Thank You
www.euroports.com