Santos Brasil foresees price renegotiation cycle ahead in 2023

Santos Brasil is preparing for another round of price adjustments in 2023, beginning with the port operator’s contract with shipping company Maersk, which expires at the end of this month. “The negotiations are advanced,” says financial director Daniel Dorea, “and we are confident that we’re going to have it renewed on satisfactory grounds for both sides.”

The company expects stability in cargo throughput this year, he says. “The catalyst in 2023 will be the renegotiation of multiple contracts, not just the one with Maersk. With price adjustments, we should see an increase in the average ticket price. This will allow the company to distribute strong dividends, carry out investments of R$ 600 million to R$ 700 million, and be in a good position to explore new assets.”

In the fourth quarter of 2022, the company recorded a net profit of BRL 135.5 million, representing an increase of 23.2% year-on-year. Ebitda (earnings before interest, taxes, depreciation, and amortization) grew 24.2%, reaching R$ 135.5 million. Net revenue also rose 5.7% to R$468.8 million.

The increase in results, according to Dorea, is already the result of the repricing of services throughout 2022. Volumes, on the other hand, saw a retraction in the fourth quarter. Container terminals handled 296,000 box units, down 7.9% year-on-year. In Santos, the reduction was 9.9%.

According to the company, the retraction was caused by three factors: the return to normal seasonal behavior of imports in Santos after the pandemic; a slowdown in imports of consumer goods from Asia; and a drought at the mouth of the Amazon River, which hampered cabotage calls.

The new liquid bulk operation at the Port of Itaqui has not yet had a positive effect on the 2022 balance sheet, but the outlook for this year is positive, according to the executive.

“We managed to commence operations [there] in the fourth quarter of 2022, but we only closed contracts in November and December. Today, more than 60% of the terminals’ installed capacity are under contracts, and new proposals are being devised,” he said. “I believe we will be able to quickly sign contracts to meet the existing capacity during the first half of the year. The company’s bet paid off handsomely, particularly in the Matopi region and agribusiness sector.”

This year, the company expects to start building additional capacity at the Itaqui terminals, which should demand an investment of approximately R$ 250 million in 2023.

Today, Santos Brasil’s focus is on current assets, says the director. “We are in an off-season for new projects. We are trying to understand the government’s priorities, but we are confident.”

Dorea believes privatizing the Santos Port Authority (SPA) has become less likely. “There has been a shift in opinion. What could still happen is the concession of services such as dredging and channel access. That appears more feasible to me,” he says. A withdrawal from the privatization project is not a problem for the director. “It’s the way things are. For the past 25 years, the company has been operating under this model of state authority.”

Source: Valor Econômico

To read the full original news article, please visit: https://valor.globo.com/empresas/noticia/2023/03/22/santos-brasil-preve-ciclo-de-renegociacao-em-2023.ghtml

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