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You may think that being a privatized port operator for the whole of Sabah would make Suria Capital a company with good returns. Unfortunately over the past 12 years, the company only achieved an average ROE of 6%. https://i.postimg.cc/4NqfFSsN/Suria-Cap-returns.png
In fact quite a substantial part of its profits came from non-port operations such as property and investments.
I think this is because the economic activities in Sabah is not as developed as those in Peninsular Malaysia. While it is a growing economy and it may some time before we see Suria Capital benefiting from this.
Privatised will expired in 10 years time if not extended for another 30 years. Everything will be surrendered to Sabah Port Authority and Suria left with nothing. This is why Suria's price keep dropping for past few years. Now, Suria will be total different scenario, Spangar bay container yard will be leased to DP world for 30 years and the rest operation will be retained at Suria. Port tariff rate will be revised and property development with Bedi( Exsim) will maximise the land value.
The tariff will be announced together with the announcement of cantractual matters with DP World. Leasing rate, tariff rate will be related and will definately a boost to Suria profit margin. Spangar Bay container port contributed about 75% (or 325K Teu) of the containers handling by Suria and expected to increase 93K TEU this year due to foreign investments at KKIP.
Previously, mostly of the containers shipped to to Sabah with loaded and returned off with empty containers. With the foreign investments in Sabah, export of good will increase and the empty containers will be filled. Definitely will benefit Suria in revenue and profit.
