Operating profit at Dublin Port up 7% to €28.5m Turnover still rising despite downturn

DUBLIN PORT Company brought home a €28.5 million operating profit in 2007, up 7 per cent on the year before, as growth in the volume of goods going through the port and a turnaround in ferry passenger numbers offset increases in council rates, writes Laura Slattery.

However, chief executive Enda Connellan said the economic downturn meant trade throughput was likely to fall slightly in 2008, after 15 years of growth. For the first half of 2008, the port had 15.3 million tonnes in throughput. This is down 0.9 per cent on the same period in 2007, when a record full-year throughput of 30.9 million tonnes was handled.

The growth last year, combined with a 12 per cent rise in ferry passengers to 1.3 million, helped the State-owned company to generate turnover of €70.5 million, up 6 per cent on 2006, without having to increase the vessel and goods dues paid by the unitised trade.

Despite the fall in throughput this year, turnover is still rising at a rate of almost 4 per cent on 2007, with growth driven by revenues from the new Topaz service station and facility for truck drivers - the largest service station in Ireland.

During 2007, the company also made a net once-off profit of €109 million from the forced sale of the Irish Glass Bottle site, resulting in a pretax profit of €130 million.

But operating costs increased 5.5 per cent to €42 million in 2007, with most of the increase attributed to rates paid to Dublin City Council, which Mr Connellan said had become a "significant overhead", putting it at a competitive disadvantage. "We're not happy with the rates," he said, adding the port was "disappointed" depreciation charges could not be taken into account when calculating the rates.

The company and its customers pay around €10 million in city rates annually. For the first half of 2008 the company paid €2.3 million in city rates. This represents 10 per cent of its expenditure.

The company became the first State port company to pay a dividend to the Government, which was worth €4.2 million to the exchequer last year.

It invested €42 million in port infrastructure in 2007. It has invested €12 million to date in 2008 and is on track to invest a total of €30 million this year.

"Despite the economic situation, we must prepare for the future," Mr Connellan said.

The port wants to add more deepwater space to accommodate the trend toward larger and more efficient ships. The plan, which will include environmental impact statements, will be submitted to An Bord Pleanála in the autumn.

The company also has a joint venture with One51 to develop deep water berths at Greenore, Co Louth, and is looking at overseas investment opportunities.

Mr Connellan said it would go ahead with its investment plans despite the Department of Transport's decision to commission a study from economic consultants Indecon about the viability of moving Dublin Port to another site, such as Bremore in north Co Dublin, and free up the Dublin Port land for new developments.

"Firstly, I would say that the ports have been set up to compete with each other. If the State decides to put in another port, then that's the State's prerogative," Mr Connellan said.

"The [ Bremore] port doesn't exist yet. It has to convert a greenfield site to a brownfield site. I think there will be an awful lot of problems to overcome," he said.

He welcomed the fact that as property values have declined, there are fewer calls for the Dublin Port land to be sold off.

"The valuation distraction is now gone, courtesy of the downturn," he said. "Economies aren't built on property speculation, but on trade."