Santos Port Authority registers record profit of R$ 203 million

Optimized spending, process reviews, and expense reductions led the Santos Port Authority (SPA) to register a net profit of R$ 202.5 million last year. The state-owned company that manages the Santos port complex saw profits increase 132% since 2019 when its net profit was R$ 87.3 million.

This is the first time that SPA has had two consecutive years in the black since 2014. In 2020, net revenue grew by 15%, to R$ 1.1 billion driven by national agribusiness, which set a record in cargo handling at 146.6 million tons and increased 9.4% compared to the previous year.

DataLiner shows that container movement at the port has increased year after year, even in 2020 compared to 2019, despite the pandemic and its effects. The volume of dry bulk transported by Santos also increased considerably in the same comparison. As expected, in terms of weight, dry bulk shipments surpassed other categories easily, but the number of vessel calls made by container ships exceeds those by bulk carriers.

Source: DataLiner (click here to request a demo).

The result was announced as the federal government prepares to privatize the Port Authority next year.

According to data released by the company, recurring administrative expenses fell by 16% annually. Recurring operating costs increased 4.2%, but less than the increase in revenues, which resulted in a gain of 1.6 percentage points in the cost / net revenue ratio; this reflects greater operational efficiency.

According to SPA, personnel expenses represent the company’s main expense item. “Throughout 2020, we implemented several measures that resulted in a 20.6% reduction in the total headcount and a decrease of almost 12% in total recurring personnel expenses,” said the company.

One of the most effective actions to optimize spending was the Voluntary Dismissal Incentive Program that encouraged 209 employees to resign, for an expected annual savings of R$ 60.9 million. The company also restructured staff in some areas leading to a further reduction of 38 employees and saving  R$14.2 million per year.

The company negotiated new healthcare plan rules for inactive employees, saving R$ 6.3 million annually. Other expenses decreased through renegotiated contracts for vehicle rentals, office cleaning services, kitchenette staff, printer rentals, and concierge and reception services.

Civil and labor lawsuit liabilities improved through effective management. The total expenses for these claims were reduced by 42.6% in 2020. The occurrence of new labor lawsuits decreased by 73.2% compared to 2019.

Other expense reductions included new rules for mooring ships – which simplified procedures and stimulated productivity – and the transfer of mooring services to the private sector.

Profit

With these changes, EBITDA, adjusted for extraordinary events, increased 48.8% and reached R$ 502.7 million, a profit margin of 47.5%. This is 12.6 percentage points more than in 2020.

“The result reflects the turnaround begun in 2019 to ensure economic and financial stability. It has allowed us to resolve old liabilities such as the pension plan’s actuarial deficit and has strengthened cash flow. This permits us to continuously improve services and make investments that are essential to sustain Brazil’s main national port”,  said the CEO of the state-owned company, Fernando Biral.

Public Auctions

Last year, the company held public auctions to lease two terminals (STS 14 and STS 14A) for handling and storing general cargo, especially pulp, in Ponta da Praia. The terminals will require a minimum investment of approximately R$ 380 million and will yield a total of R$ 505 million in grants that went to SPA’s cash holdings.

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