Agribulk bright spot as overall throughput down in transitioning Rotterdam

(Posted on 22/02/24)

Last year saw major investment decisions that are contributing to making the port and the logistics chain to and from Rotterdam more sustainable. The financial results were stable, putting the Port Authority in a position to commit to further investments for a future-resilient port in the years to come as well.

Total cargo throughput in the port of Rotterdam this year amounted to 438.8 million tonnes, 6.1% less than in 2022 (467.4 million tonnes). The fall was mainly seen in coal throughput, containers and other dry bulk. Throughput rose in the agribulk, iron ore & scrap, and LNG segments.

The throughput of dry bulk in 2023 was 11.8% down on 2022. A striking development in the agribulk segment was the increase in maize imports by 50% after crop failures due to drought and floods in Europe. Coal throughput fell by 20.3% to 23.1 million tonnes, mainly because of low demand for energy coal for power production. In 2022, demand for energy coal rose sharply due to concerns about energy security and large increases in gas prices. The throughput of crude oil was 9.9% higher at 28.1 million tonnes. Ore stocks were replenished after low imports of ore in 2022 pursuant to low steel production. Outgoing scrap in Rotterdam was 32% higher.

The negative figures for the throughput of other dry bulk are attributable to lower demand for raw materials from European industry. The striking decrease of 49.4% in other dry bulk and the increase of 31.3% in agribulk were caused by a correction of erroneous declarations in the seaport dues system in 2022. After the elimination of this distortion, the decrease in other dry bulk was 24.7% and the increase in agribulk was 3.0%.

Boudewijn Siemons, CEO of the Port of Rotterdam Authority: ‘2023 saw ongoing geopolitical unrest, low economic growth due to higher interest rates and faltering global trade, all of which had a logical effect on throughput in the port of Rotterdam. However, the year also saw many major investment decisions and milestones in the transition to a sustainable port. We made the final investment decision for the construction of the CO2 transport and storage project, Porthos. Construction work also began on the national hydrogen network in the port of Rotterdam. And we celebrated a number of significant developments in the logistics segment this year, such as the announcement of the expansions of the APMT and RWG container terminals, and the opening of the CER. All these developments will take us a step closer to a successful and future-resilient port and industrial complex.’

The Port Authority has had a stable year financially. Revenue rose by 1.9% to € 841.5 million, consisting mainly of contract revenue from land lease, and port dues. As a result of price changes and new contracts, contract revenue rose by € 28.4 million. Revenue from port dues fell by € 4.6 million due to a combination of lower throughput and a higher price per tonne. Operating expenses increased by 3.8% (€ 10.7 million) to € 292.9 million because of higher payroll expenses and overhead. The operating result before interest, depreciation and taxes (EBITDA) rose on balance by 0.9% to € 548.6 million. The net result was 5.6% (€ 13.7 million) down at € 233.5 million (2022: € 247.2 million). The lower net result was attributable to two one-off items in 2023. Acquired nitrogen deposition rights were revalued downward (€ 8.0 million) in response to the ruling from the Council of State relating to the 25-kilometre cut-off. In addition, the Porthos guarantee premium (€ 7.3 million) was booked, leading to a lower result for participating interests. Furthermore, interest expenses in 2023 were € 6.8 million higher because of higher interest rates than in 2022. The dividend proposal for the shareholders (the Municipality of Rotterdam and the Dutch State) was € 129.0 million (2021: € 132.3 million).

The Port Authority invested a total of € 295.4 million, almost 15% more than in 2022 (€ 257.0 million).

Liquid bulk throughput was 3.4% lower last year. Container throughput in tonnes was 6.8% lower in 2023 at 130.1 million tonnes; the fall in TEUs was 7.0% to 13.4 million TEU. Container throughput has proved to be very volatile in recent years in response to COVID and geopolitical developments. The decline that began in 2022 continued in 2023. The main reasons are lower consumption, lower production in Europe and the discontinuation of volumes to and from Russia pursuant to the sanctions. Port calls in the container segment were up slightly by 1.0%. However, container ship cargoes were 7.8% lower. Roll-on/roll-off traffic (RoRo) fell by 5.0% to 25.9 million tonnes. The weak British economy and lagging consumption continue to be the main causes. The 15,1% fall in other break bulk is largely attributable to the decline in container rates, which fell sharply in 2023, resulting in more cargo being shipped in containers rather than as break bulk. In addition, disappointing demand in Europe due to inflation and rising interest rates meant that many stocks were left in breakbulk terminals for long periods of time, leaving less room for additional cargo acquisition.

Against the backdrop of geopolitical developments and upcoming elections in several countries, 2024 is also expected to be an unpredictable year. It is all the more important in these turbulent times for the port to maintain a steady course and to implement plans that will further the transition. Construction work will begin on Porthos in 2024 and the development of the second conversion facility will continue. Investment decisions are expected for hydrogen plants, bio-refineries, the Maasvlakte-Zuid rail yard and the Princess Alexia Viaduct on the Maasvlakte.