Business Performance of Luka Koper in 2012

26.02.2013

At its session of 22nd February 2013, the Luka Koper d.d. Supervisory Board was presented the non-audited 2012 business report of Luka Koper d.d. and the Luka Koper Group. 

In 2012, the Luka Koper Group handled a total of 17.9 million tonnes of cargo, which is a year-on increase of five percent. Based on non-audited data, the Group's operating revenues in the amount of 144.4 million euros were one percent ahead of the 2011 level and four percent down on expectations. The difference in the growth of operating revenues and the physical volume of cargo throughput can mainly be attributed to a fall in storage charges; a more rapid turnover of cargo has resulted in the decline of revenues from storage charges. 

EBIDTA in the amount of 47.2 million euros recorded a year-on decrease of five percent. The Group's operating profit stood at 19.2 million euros, which is fourteen percent down on the 2011 level. There was a significant year-on decrease in financial expenses, mainly as a consequence of lower impairments to financial investments and lower interest costs. The Group's net profit in 2012 stood at 10.4 million euros, which is ten-million euros ahead of 2011 and 3.2 million euros down on expectations. The Groups' financial liabilities fell by 22.3 million euros, and amounted to 183.4 million euros as of 31st December 2012. The Luka Koper Group has been financially rehabilitated and today has the financial strength necessary for further development of the port.

Luka Koper Group
 
2008
2009
2010
2011
2012
Index
2012/2011
Operating revenues (million euros)
137.2
116.1
127.3
143.6
144.4
101
EBITDA (million euros)
42.6
13.9
40.5
49.7
47.2
95
Net profit (million euros)
17.2
-66.6
-2.9
0.4
10.4
2,329
Investments (million euros)
146.9
112.5
20.2
19.8
18.7
94
Financial liabilities (million euros)
201.3
234.5
226.2
205.8
183.4
89
Cargo throughput (million tonnes)
16.1
13.1
15.3
17.1
17.9
105


In 2012, the Luka Koper Group generated revenues which are five percent ahead of 2008, the year before the crisis. In addition, by 2011 EBIDTA was already ten percent above the 2008 level. This has allowed the company to reduce its debts and further pursue strategic investments in particular at the Container Terminal which in 2012 maintained its leading position among the North Adriatic container terminals. Despite harsh economic conditions at home and abroad, Luka Koper handled 17.9 million tonnes of cargo in 2012, which is nearly two million tonnes up on the 2008 level. 

As regards its core activity, Luka Koper's performance is positive, a fact that is also corroborated by net profits which continue to increase. It is a well-known fact that over recent years the LK Group had to write down a number of investments that either ran aground or fell victim to the economic recession. 

Luka Koper is Slovenia’s sole seaport, but it operates in a very competitive international market. Indeed, seventy percent of cargo handled is in transit to or from Koper’s hinterland markets in Central and Eastern Europe. In addition to the Northern Adriatic ports, and in particular nearby Trieste and Rijeka, Luka Koper faces tough competition from the major ports of northwest Europe. In spite of this, Koper has managed to acquire the largest market share of its biggest and most important continental market - Austria - which accounts for nearly one-third of Luka Koper's cargo throughput, beating Europe’s largest port - Rotterdam - in the process. 


Ready for new investment impetus 

Infrastructure investments have declined considerably over the past three years. In addition to the economic recession, Luka Koper also found itself in a difficult financial situation. Today, the company is financially sound, debts have been reduced and we are ready for new investments in the expansion of port infrastructure. These shall be realised gradually and in a considered manner. It is a most apparent that the current single-track railway line serving the port shall only meet the company's requirements to 2018. Sixty percent of total cargo handled by Koper is transported by rail, and an insufficient railway connection may present a huge obstacle for the further development of the port in years to come. 

The depth of port waters is also of major significance, in particular at the Container Terminal where our business partners – the shipowners – are looking to use ever larger and more heavily loaded vessels. Dredging the berth and harbour area is closely correlated with the space available for silt-deposit landfill. Last autumn the company found itself at a dead end due to the prohibition of further silt disposal on land owned by Koper Municipality. Fortunately, an alternative has now been found in collaboration with the Ministry of Infrastructure and Spatial Planning, i.e. a plot located below Sermin which was intended for the removal of material in the construction of the second rail track. The project is again up-and-running; a few days ago, Luka Koper selected a contractor to undertake archaeological research across the new disposal site, as well as published a tender for project documentation via the public tender portal. 

The commencement of archaeological research depends on the favourable opinion of the Ministry of Education, Science, Culture and Sport; in the meantime discussions are taking place with the Ministry of Infrastructure and Spatial Planning as to a concession re easement in the use of the land for the disposal of dredged materials. If these bureaucratic procedures are reasonably short, and there are no unforeseen complications, the sea depth at the Container Terminal should facilitate the arrival of vessels with drafts of up to 14 metres by the autumn. 

Luka Koper often draws attention to the fact that the port is but one link in the logistics chain. Hence its success and development not only depend on the port's infrastructure, the quality of services provided and their competitive price, but also upon connections with the hinterland as well as the support of all stakeholders. It should not be forgotten that more than four thousand jobs are directly dependent upon port operations, and that every euro generated by the port is more than an extra euro at the national level. Further to this, Luka Koper pays 3.5 percent of its income as a Concession fee every year - despite the fact that the company alone, without state assistance, finances all port infrastructure - as well as remunerates nearly five million euros per annum in compensation for land-use.