Forth Ports 'holding up' despite hit in recycling

Published on Friday 26 June 2009 21:48

FORTH Ports yesterday reported that first-half results will be in line with last year, despite taking a hit from the recession at its materials recycling firm Nordic and its Tilbury Container Services arm.

The Edinburgh-based firm said in a management statement that cash generation from operations in its ports division remains "good", but added that it was tightly controlling expenditure in a bid to reduce debt.

Forth admitted it had made a "handful" of redundancies in its cash-strapped property division – which last year wrote down the value of all of its assets, as a result of the collapse of the property market – but said the group's headcount remained fairly steady at 1,300.

Group chief executive Charles Hammond explained: "The business is generally holding up well and traditionally our trading performance has been weighted towards the second half of the year.

"Although forecasting for the full year is difficult given current economic uncertainties, we believe that the outcome will be satisfactory."

In property, the group said that work has continued on the outline planning application and masterplan for the Harbour development in Leith Docks, which was submitted to City of Edinburgh Council in December 2008.

The development hit controversy in May when Forth was forced to drop plans to rename the heart of Leith Docks as "Edinburgh Harbour" amid opposition from residents.

Forth said its Ocean Terminal shopping centre in Edinburgh was performing well. One new tenant, Superdry, is due to open in August, while Forth said that two other new tenants were expected to be signed up in the third quarter.

Hammond added: "We're still in a very difficult property market. We wrote down the value of our land holdings last year."

The company has until recently been heavily reliant on the property side of its activities, but the downturn in the economy resulted in property consultants DTZ slashing the market value of Forth's assets by 222 million to just 60m in March, warning that 80 per cent of its land currently had no development value.

Hammond revealed that the company was cutting back on investing in infrastructure at its major projects in a bid to save costs.

He commented: "We are reducing the amount of extra infrastructure we are putting in, such as extra roads to flat developments, until the property market picks up.

"We have had to make a very small number of redundancies – just a handful – at the division, but we are aiming to cut costs in other ways rather than reduce our headcount any further."

It its ports division, Forth said piped cargo tonnages were in line with last year.

The firm owns and operates seven UK ports – Tilbury on the Thames, Dundee on the Firth of Tay and five on the Firth of Forth – Leith, Grangemouth, Rosyth, Methil and Burntisland.

The company added in the statement: "The results for the first half are expected to be in line with last year, with the exception of Nordic, our materials recycling business and Tilbury Container Services, which have been more severely affected by the economic downturn."

Forth Ports is due to report its first half results – for the six months to the end of June – on 27 August.

Earlier this year, it emerged that Hammond had more than 200,000 cut from his pay and benefits package last year, as the company reported a loss of 30.7m for 2008.