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Port of Rotterdam fully operational in first half of 2020, COVID-19 pandemic depresses cargo through





Rotterdam, July 23 2020 - The port of Rotterdam achieved throughput of 218.9 million tonnes in the first six months of 2020, 9.1% less than in the first half of 2019, which was a throughput record at the time. Despite the disruptive impact of the COVID-19 pandemic on the economy, production and logistics, the port of Rotterdam remained 100% operational. The economic impact of the COVID-19 pandemic is the primary factor explaining the

decrease in volume.


A message from Allard Castelein, CEO of Port of Rotterdam, on the half year results


Highlights of the first half of the year:

• Total throughput 218.9 million tonnes (-9.1%).

• Significant reduction in throughput of coal, ores and mineral oil products, small

reduction in container throughput, increase in throughput of biomass and LNG.

• Revenue increased 0.7% to € 360.4 million.

• Result on ordinary activities fell 4.8% to € 128.4 million.

• The Port Authority's healthy financial position makes it possible to continue to invest

at a high level (gross investments amounted to € 136.4 million), for example in the

Theemsweg Route, Container Exchange Route and Maasvlakte Plaza.

• Partly at the request of the central government, the Port Authority has reviewed

investment projects that can both make the Netherlands more sustainable and

accelerate the recovery of the economy (Starter Motor).


Allard Castelein, CEO of the Port of Rotterdam Authority: “The Dutch economy and the port of Rotterdam are dependent on developments in world trade. The negative economic impact of the COVID-19 pandemic is being felt worldwide. It should therefore come as no surprise that throughput volumes in the past six months were considerably lower than in the same period last year. On the positive side, the throughput volumes in the second quarter turned out to be better than initially expected. Nevertheless, it is not in Rotterdam's nature to sit back and watch. That is why the Port Authority has conducted a review to determine which public private investment projects can be accelerated. In that way, the government and the port of Rotterdam can team up to further the sustainability of the economy, while giving it a kick-start at the same time.”


Developments by category of cargo throughput


Dry bulk

The throughput of dry bulk amounted to 30.8 million tonnes, 19% less than in the first half of

2019. Dry bulk accounts for 14% of throughput in the port of Rotterdam. Falling volumes were seen primarily in the throughput of iron ore and scrap (-22%) and coal (-34%).

The steel factories that use the port of Rotterdam for the supply of ore are producing much

less than usual. Demand for steel fell sharply from March onwards as a result of production

stoppages in the automotive industry and construction.


A low gas price meant that more gas and less coal was used for power production. In

addition, favourable weather conditions meant that there was an increase in the available

wind energy, reducing the need to switch to coal-fired power stations.

There was a sharp increase in biomass (+109%) due to the continued rise in co-firing in

power stations.


Liquid bulk

Liquid bulk throughput amounted to 99.8 million tonnes. That is approximately 10 million

tonnes less than in the first half of 2019, a fall of more than 9%. Liquid bulk accounts for 46%

of throughput in Rotterdam. Throughput of mineral oil products fell sharply (-22%). In the case of crude oil, the fall was only slight (-4%) and LNG throughput actually increased slightly (+2.6%). Throughput of other liquid bulk in the first half of the year matched the level of last year.


The fall in the mineral oil products category related mainly to fuel oil. The throughput of crude oil declined primarily because of falling demand. As a result, some large refineries were operating at less capacity than usual. The COVID-19 pandemic led to a further drop in the gas price, making it appealing to use LNG from the North Sea and Atlantic Ocean for power production in Europe.


Containers and break bulk

Container throughput was only 3.3% down on 2019 (in tonnes, 7% in TEU). That is 2.5 million tonnes less cargo. Shipping companies cancelled up to 20% of all their services in May andJune. The decline in throughput was nevertheless less pronounced due to the increased call sizes of vessels calling at Rotterdam. The number of empty containers was considerably lower than in the same period last year because imports of containers from Asia have fallen while exports have actually risen. Break bulk fell by 11% in the first half year. RoRo throughput was 12% lower. Most of the drop was at the beginning of the second quarter, when the lockdown was in place in most of Western Europe. Volumes increased again towards the end of the quarter.


Progress in energy transition

In the past six months, meaningful steps have once again been taken in the phased

transformation of energy supplies and the encouragement of circular activity in the port. For

example:

• Zero Emission Services (ZES) was established by Engie, ING, Wärtsilä and the Port

of Rotterdam Authority to operate inland shipping with exchangeable battery

containers.

• The environmental impact assessment and all the necessary permit applications for

the Porthos project were completed and submitted to the competent authority in June.

The investment decision is expected to be made as soon as the permits are received

(second half of 2021).

• The announcement of the construction of a site for electrolysers (for the production of

green hydrogen) on the Maasvlakte with Shell as the first customer, at the same time

as the construction of a public hydrogen network in the port area by Gasunie and the

Port of Rotterdam Authority.


Progress on the digital transition

Our ambition is to be the smartest port and, in that way, to strengthen our competitive

position. Good results have also been achieved in the area of the digital transition during the

past six months. For example:

• The further implementation of the digital port infrastructure for smooth and safe

shipping handling and the management of the port infrastructure.

• The international expansion of PortXchange is going well. In the past six months, pilot

projects were implemented with Shell in Houston and Maersk in Felixstowe and

Algeciras.

• With the addition of a new route engine and the use of data that come directly from

carriers and operators, Navigate is now more efficient and complete, and therefore

more reliable.

• Nextlogic is operational.


Financial situation of Port Authority healthy, ongoing high level of investment

Revenue increased by 0.7% in the period under review to € 360.4 million. The increase was

primarily attributable to an increase in contract income, in part from new rental contracts and

in part from the price indexation of existing contracts.


Operating expenses were 3.5% higher than in the first half of last year, mainly because of

higher exploitation and other expenses due to some one-off effects. Labour costs fell by

€ 1.8 million and this was also largely due to a one-off charge for the participation scheme for older employees in 2019. Depreciation and amortisation increased by € 3.6 million, mainly because of the substantial investment programme of recent years.


The result on ordinary activities before tax for the first half of 2020 was € 128.4 million, a

decline of 4.8% by comparison with the first half of 2019. A result after tax of € 98.1 million

was booked in the first half of 2020.

Gross investments in the first half of 2020 amounted to € 136.4 million. The Port of Rotterdam Authority has deliberately chosen to continue investing in the Port Industrial Complex during the Covid-19 period. The most important investments for the first half of 2020 were the construction of the Theemsweg Route, the construction of the Container Exchange Route and the extension of Maasvlakte Plaza. The level of investment for the whole of 2020 is expected to be in line with last year (2019: € 338.3 million).


Starter Motor: a kick-start for the Dutch economy

Investments are good for the economy and they can help it to recover faster.

That is why the Port of Rotterdam Authority has reviewed the investment projects to see

which of them can be brought forward. These are the projects that can accelerate economic

recovery, working like a sort of starter motor to get the economy going again.


The Starter Motor cuts two ways: it accelerates forward-looking investments in growth and

earning capacity while also accelerating the energy transition and efforts to make the

economy more sustainable. Examples of Starter Motor projects are the construction of a

hydrogen network, the roll-out of shore power and the construction of a heat roundabout.


Outlook

There is considerable uncertainty about how long the recession will last and when recovery

will begin. The recovery of the world economy depends very much on whether there will be a

second wave of virus infections. And another factor is whether the EU and the UK will manage to conclude a post-Brexit trade agreement in the coming months. A cautious recovery of the economy is expected in the rest of the year. As a result, volumes in the port will not decline further but there will probably be no full recovery of volumes. The total throughput volume for the whole of 2020 is therefore currently expected to be significantly lower than in 2019.


To download a copy of the press release, please click on the document below.


Port of Rotterdam fully operational in f
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