Sources have exclusively informed Daily News Egypt that the Alexandria Container and Cargo Handling Company (ALCN) will revise its container fees in the near term.
The company is expected to hold a Board of Directors meeting to approve the preliminary results for the first quarter (Q1) of fiscal year (FY) 2020/21. Naeem Research expects the bottom-line to amount to EGP 306m, down 20% quarter-on-quarter (q-o-q) and 27% year-on-year (y-o-y).
Naeem Research also expects the top-line to come in at EGP 546m, down 26% q-o-q and 19% y-o-y. Container volumes are forecast to amount to 205,000, down 17% q-o-q and 10% y-o-y, with average fees per container estimated at EGP 2,660, down 12% q-o-q and 9% y-o-y.
“As the first quarter of the financial year usually witnesses lower containers volumes compared to the rest of the year, revenues are expected to be the lowest during the year,” Naeem Research said, “The y-o-y drop in volumes, is expected to be impacted by increased competition, and the effects of the pandemic on international trade.”
Pharos Research sees that ALCN’s operational performance was negatively affected by restrictions in trade activity, delay in expansion plans and local currency appreciation. While the global situation was not in ALCN’s favour, the quarterly seasonality shielded performance in Q4 of FY 2019/20.
Pharos Research expects the number of containers to aggressively decline in the first half (H1) of FY 2020/21, reflecting -15.1% in the first two months (2M) of the fiscal year. This has been attributed to the continuous potential negative impacts of the novel coronavirus (COVID-19) pandemic on trading activity.
This is likely to be followed by a slight pick-up and gradual recovery in FY 2021/22, once economies reopen and governments ease lockdowns and movement restrictions.
Therefore, even though ALCN is expected to witness a decline in volumes that could probably hurt the results of FY 2020/21, Pharos Research expects that volumes will eventually grow after economies reopen and expansion plans are completed.