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PNG Ports Corporation Records K83mil Profit
by PNG Business News - March 25, 2021
PNG Ports Corporation has reported a profit of K83 million for the full year of 2019.
This permitted Kumul Consolidated Holdings (KCH) to receive a full-year dividend payment of K21 million, which was finalized yesterday with the presentation of K11.4 million to KCH as a second payment following the first part of K9.6 million paid in November.
Chairman Kepas Wali said PNG Ports had had a challenging two years, with the Covid-19 impacting the majority of its business.
“We saw a decline in shipment and cargo through our ports, but because management instituted certain stringent measures in management and costs, PNG Ports has been able to maintain a healthy bottom line,” he said. “Despite the Covid-19, we have been able to maintain the ports operationally. Management quickly introduced certain protocols at the ports when the pandemic hit to keep the ports operating. There wasn’t any stage that the ports were closed down. They (PNG Ports Corporation) were able to separate the operation of the ships from the shore so shipping continued and cargo was still transmitted through our shores.”
Wali also explained that the dividend was based on a loan agreement they had with Bank South Pacific (BSP), which stipulated that only 25% of profits could be paid out as dividends. The dividend payment for 2019 was timely, according to KCH managing director Isikeli Taureka, since the money would be injected into other state-owned enterprises (SOEs) that were struggling during the Covid-19 period.
“One of the things we appreciated is that apart from the major ports, most of the secondary ports around the country are at least recovering cost and breaking even.”
The dividend payment was agreed by State Enterprise Minister William Duma.
PNG Ports, according to Duma, has been a reliable performer over the years.
He stated that the K21 million spent in 2019 was a good effort.
“We need every toea and the K21 million is a lot of money and in times like these millions of kina makes a big difference,” he said.
PNG Ports Corporation has also paid the government a total of K43 million in royalties.
PNG Business News - March 31, 2021
PNG Ports Explains Their Decision to Deal with Covid-19
COVID-19 had a major impact on Papua New Guinea's exports and port movement, but the PNG Ports Corporation had taken political decisions to handle the situation. In recent months, the world has seen and continues to see a significant shift in everyday lives, which has had significant implications for industry, commerce, and transportation. The pandemic's emergence altered both economic and trade forecasts for 2020. New predictions have reduced forecasts to negative 4.9 per cent, down from an estimate of 3.6 per cent increase in container trade worldwide in the fourth quarter of 2019 to 2.5 per cent in January 2020. PNG Ports chairman Kepas Wali clarified that the company's earnings were the result of tight cost-cutting steps and prudent decisions taken by management. Last year, he said, the closing of borders and prohibitions surrounding the COVID-19 pandemic struck PNG Ports hard, which is dependent on trade. Despite COVID-19, PNG Ports has continued to operate all of its ports. “When COVID-19 hit the country and the world, the management of PNG Ports worked quickly and instituted certain protocols and prevention measures just so we can maintain our ports operations,” he said. “The management’s quick response to the situation has made it possible for all ports to operate during the hit by the pandemic through until now.” He said the pandemic's consequences on the company were expensive, but PNG Ports is happy with the positive results obtained by their management's swift reaction and aims to continue this going forward.
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PNG Business News - April 08, 2021
Price of Oil Recovers in Spite of COVID
According to Oil Search, oil prices have risen steadily in recent months from the initial effect of the Covid-19 last year, when prices ranged about US$43 (K150) per barrel of oil (bbl), to levels above US$60/bbl (K210) since February this year. In response to questions, a group spokesperson said,“ To date, there has been no impact to production in our Oil Search operations in PNG as a result of the recent surge in the Covid-19 cases. The increase in confirmed Covid-19 cases in PNG has prompted Oil Search to enact its crisis and emergency management plans. The health and safety of our employees remain the company’s highest priority and teams have been assembled in PNG and Sydney to deploy additional support to protect our people and to ensure the safety and reliability of our operations. At our PNG field locations, we continue to operate under precautionary protocols established in 2020, which includes redeployment of non-essential personnel, restriction of access and travel to field locations and implementation of strict preventative measures and quarantine zones.” He added, “We have enacted additional risk mitigation measures include establishing ‘cocoons’ for our field teams and extending the quarantine period for employees and contractors. To date, there has not been a single positive case recorded in our operating sites outside of quarantine. We have also conducted more than 7,500 Covid-19 tests at our medical clinics and quarantine facilities in PNG. Beyond the safety of our own people and assets, Oil Search stands ready to work with relevant Government and health authorities to assist in PNG’s overall response to the Covid-19. This includes the dissemination of accurate information around the Covid-19 and vaccinations, supporting provincial health authorities to implement an effective vaccination programme, and providing logistics and cold chain support where required and as directed by the Government.”
PNG Business News - April 08, 2021
Lae Chamber Welcomes Green Energy
The Lae Chamber of Commerce and Industry (LCCI) said it welcomes any power plan that is long-term, environmentally friendly and creates jobs in the delivery of efficient, low-cost electricity in Lae and Morobe. President John Byrne referred to concerns regarding the PNG Biomass project in the province's Markham Valley when he said, “PNG Biomass has provided a solution which ticks most of these boxes, whether it fits the plan of PPL (PNG Power Ltd) is a decision beyond our scope. The recent Ramu 2 announcement is another such solution. Our people of Lae, Morobe, and PNG, not only expect but deserve, reliable, constant and cost-effective power solutions.” According to Byrne, the Lae business group praised the Lae PPL team for their commitment, hard work, and communication in maintaining an ageing and insecure grid infrastructure operational. He said many companies that had short or long-term contracts with the government were failing because of the long-standing outstanding Government bills owing to them. “The quantum of debt is not specified but very large and this added to the impact of the Covid-19, resource debates and a lack of forex is taking a toll on the business houses.,” he said.
PNG Business News - April 08, 2021
Businesses Concerned Regarding Government Debts
With the outstanding amount of government debt owed to the sector, pending landowner fees, and rising law and order woes, businesses are concerned about 2022. According to Chey Scovell, chief executive officer of the PNG Manufacturers Board, conversations within the business community revealed that the government owed companies more than K2 billion. “I don’t have an updated list, but from general conversations with business and what is being raised with the various chambers, it would exceed K2 billion,” he said. “We hear that contractors for the Department of Works have claims for this amount alone, so the number could be as high as K3 billion. No doubt they may have paid some, technically a K1 payment would be paying at least some. The Budget hasn’t been able to be implemented properly at all. Recurrent expenditure, monthly bills for things like water, power, security, rent, are not being paid in full or in many cases at all. We’ve suggested that the Government put up an online portal/list, for all creditors to register for the Government to show full or progressive payments.” Scovell compared what the government was doing to the private community to what would happen if everybody started paying taxes for one to five years but continued to use government programs. “They wouldn’t be able to survive, so how is it that they expect businesses to carry on?” he said. “It is also a bit of a cop-out that Treasury is taking a long time and in many instances taking extensive reviews of claims to see if they will pay them and by how much.” Scovell argued that the government was required to behave in good faith and to set a precedent, but that forcing or intimidating companies to make substantial reductions in compensation due for goods and services rendered was bad form. “We note there are many dodgy claims, but there seems to be little evidence that hires car firms, public works contractors and catering firms (reported as problematic areas) are having the same scrutiny,” he said. “BOC Gas waited years to be paid for medical gases such as oxygen supplied to PMGH (Port Moresby General Hospital), it was reviewed twice that I know of and not paid. The other item of note is that debt carried is a growing debt. The older it gets the more it has cost the businesses.” He added, “Also, our currency has been depreciating, many businesses based their fees on the foreign exchange rates at that time, some even had loans Just like our tax penalties, the longer they are overdue, the higher they should become. This Government isn’t doing to others as it does for itself. We still have micro, small and medium enterprises that have suffered duress due to non-payment of bills going all the way back to our 40th Independence, same goes for the 2015 Pacific Games, we hear from the regional chambers that there are many outstanding claims for the past two elections. Again, if we had a publicly available list, the Government wouldn’t be able to hide behind confusion and people could whistleblow on dubious claims.”