It is important to put in context that, notwithstanding the reduction, Dublin Port is handling five times the trade that it handled just fifteen years ago.
Dublin Port remains Ireland’s premier port, handling two-thirds of containerised trade to and from Ireland and 50% of all Ireland’s imports and exports.
The reduced demand from consumers means that trade levels in Lo-Lo (Lift on-Lift off) and Ro-Ro (Roll on-Roll off) fell during the year. Lo-Lo twenty-foot equivalent units (TEU’s) were 9% lower in 2008 at 677,000 TEU’s while Ro-Ro trade declined by 4.1% to 704,000 units.
In bulk trade, tonnage of Bulk Liquids at 4.1 million tonnes remained constant on 2007 levels, while throughput in Bulk Solids fell slightly by 2.9% to 2.4 million tonnes. Break Bulk /Project Cargoes increased from 70,000 tonnes in 2007 to 164,000 tonnes in 2008.
FINANCIAL REVIEW
Despite the overall 4.4% fall in throughput at the Port, 2008 was yet
another strong financial year for the Company. Both turnover and underlying
Operating Profit, before Exceptional Operating Items, remained broadly
in line with 2007 levels. While cargo dues were negatively impacted
by the 4.4% fall in throughput, the very positive impact of the Company’s
new integrated Service Station and Truck Park, which was fully operational
from March 2008, resulted in a marginal increase in overall turnover
to €70.6m. As a result, the Company’s underlying Operating Profit, before
Exceptional Operating Items, held up very strongly at €28.1m in 2008
(2007: €28.5m). Operating Profit at €27m increased from €21.7m the previous
year resulting in an Operating Margin of 38.2% (2007: 30.8%).
CONSTANT IMPROVEMENT
As an organisation we are focused on helping to address the challenges
of the Irish economy. The current economic climate will place great
emphasis on ensuring competitiveness. These new realities require a
greater emphasis on the smooth, reliable, secure and cost efficient
movement of goods. Our investment of over €250 million in infrastructure
since 1997 and the introduction of nine competing terminals ensure that
Dublin Port remains the most cost efficient way for importers and exporters
to move goods to and from Ireland’s largest market.
With our customers at the forefront of our business model, and to protect our robust financial performance, we continued to improve the Port’s facilities by investing €26.6 million in capital expenditure in 2008. In March 2008 the Minister for Transport, Mr. Noel Dempsey T.D. officially opened Ireland’s largest service station at the gateway to the Port Tunnel following an investment of €7 million, the majority being invested by Dublin Port Company. This European motorway style service station has a myriad of facilities including fuel, truck-park, washrooms, a restaurant and restrooms. Our focus of constantly investing in our facilities to keep pace with the requirements of our increasing volume of customers will continue.
Speaking at the opening Minster Dempsey, said: “The opening of this service station is a great boost to the Country’s economy. Dublin Port is a vital part of keeping trade moving in Ireland. This facility will be of huge benefit to the haulage industry, the 4,000 people working at the Port and the 1.4 million ferry passengers that use ferries from Dublin Port.”
FUTURE NEEDS, FUTURE SOLUTIONS
As an open island-based economy, Ireland is hugely dependent on ports.
At peak periods during the week some 11 kilometres of trucks roll off
the ferries and have effected their deliveries to locations like Liffey
Valley, Dundrum, Blanchardstown and the Square in Tallaght before many
of us have risen for our breakfast.
We have to ensure that importers and exporters can continue to depend on us to move trade through Dublin Port without delay. While we are currently experiencing a fall-off in trade levels we must ensure that we have sufficient capacity to service their needs well into the future.
In this regard we have made our formal submission to An Bord Pleanála under the Strategic Infrastructure Act, which was enacted to deal with the planning of major infrastructural projects. As part of our commitment to providing solutions for our economy we made an application to An Bord Pleanála for planning permission for our Dublin Gateway proposal. The completion of Dublin Gateway will provide much needed additional capacity at Dublin Port, which is of strategic importance to the Irish economy and its capital City. It will enable Dublin Port to continue its vital role, located as it is at the mouth of the Irish economy. It will support the 4,000 real jobs in the Dublin Port estate and protect the €35 billion per annum in trade flows in and out of the Port at the heart of its main market. At the time of writing the Oral Hearing is scheduled for May and we expect to have a decision from An Bord Pleanála during 2009.
CONTINUED FOCUS ON EFFICIENCIES
Since corporatisation, Dublin Port Company has been focused on investment
in the modernisation of systems, processes and work practices. This
commitment means that 2008 is the seventh consecutive year the Company’s
payroll costs have been reduced. Consequently, staff numbers have fallen
by almost two-thirds since 1997 from 465 employees to 160 employees
in December 2008. In 2008, the Company’s payroll expenditure was reduced
by a further 4.5% to €12.4m. As a result, payroll costs are now in excess
of 35% lower than in 2001, putting the Company in a very strong position
to remain competitive in the future.
During the year there was a slight increase of 1.4% in operating expenses, excluding Exceptional Operating Items, to €42.5 million. Non-pay costs rose by €1.2 million to €30.1 million. However, when the 10% increase in City Rates payable to Dublin City Council and the €1.5 million cost of our bi-annual dredging programme are stripped out, non-pay costs actually fell by 3%.
The Company is committed to providing a return to its shareholder and 2008 was the second year that the Company paid a dividend to the State. The dividend, amounting to €5.1m, was paid in June 2008 which represented an increase of 22% on 2007.
One of the most significant achievements of this Company has been the tackling of the pension fund deficit we inherited on corporatisation in 1997. Since then we have invested over €236 million in the fund, with €13.6 million being paid into the fund in 2008. In what was a very difficult year for pension funds generally, where negative returns of 30% to 40% were experienced, the Dublin Port Company fund showed a decline closer to 10%. This was as a result of the Company’s and the Trustees decision a number of years ago to re-structure the funds portfolio to match the maturity and liability profile of the fund. As a result, the Company’s funds continue to meet the Minimum Funding Standard prescribed by the Pensions Act 1990.
PARTNERS IN THE COMMUNITY
Each year we highlight our commitment to our Corporate Social Responsibility
programme. We take our responsibilities in this area very seriously
and we commit significant resources to it.
An outline of our programme and achievements during 2008 is included in the Annual Report.
We will continue to work with the local community and beyond to identify areas where we can make a real difference.
TOURISM
Dublin Port Company places great importance on developing and promoting
tourism through the Port. Following the significant increases in 2007,
regrettably 2008 saw a decline in ferry travel, which was in line with
the overall reduction in the Port’s throughput. Ferry passenger numbers
declined by 4.6% to 1.26 million passengers while tourist cars fell
by 2.1% to 266,000 units.
The cruise industry continues to grow and this year Dublin Port Company hosted a record number of 83 cruise liners, the same number as the famed port city of Hamburg, carrying in excess of 75,000 passengers and crew. Dublin Port Company’s tireless work in promoting Dublin as a leading cruise destination has generated a major cash boost of between €35 million and €50 million for the local economy through direct and indirect spend every year.
2009 will also see a milestone in Dublin Port Company’s development of the cruise sector in Ireland with Princess Cruises confirming their first turnaround in Dublin of “Tahitian Princess” carrying in excess of 700 passengers. This will increase tourism revenues even further. The success of this turnaround will ensure more turnarounds in the future, which would mark further progress for Dublin Port in the evolution of this trade.
OUTLOOK 2009
2008 was yet another strong year for Dublin Port Company in terms of financial
performance. However, 2009 presents significant challenges for the Irish
economy and for Dublin Port Company. We have a considerable task ahead
of us to maintain the strong growth that we have all worked so hard
to achieve over the last number of years.
Recently economist David McWilliams spoke about how Ireland Inc. can overcome the challenges facing our economy. He highlighted the key role trade will play, and said, “Well run strategic assets such as Dublin Port will become the basis for the recovery of the Irish economy.”
We are committed to maintaining Dublin Port as the port of choice for Ireland’s importers and exporters and to get us through the challenging period ahead through to the other side when growth returns. We will achieve this by ensuring that Dublin Port continues to be the cleanest, greenest and most efficient way of getting goods to consumers and facilitating exporters. We have proposals to invest €100m in the next five years to utilise the best available technology to grow the business. We will continue to exploit the full potential of the cruise industry and make Dublin Port a ‘Home Port’ for cruise liners. We will continue to develop the Port in line with the City’s social, cultural and economic objectives in a responsible and sustainable way.
The continued success of Dublin Port Company and Dublin Port is down to the joint contributions made by our customers, our staff and our Board of Directors.
I would like to express my thanks to our customers for their continued investment in Dublin Port. Shortly after year-end, Joe Burke stood down as Chairman of the Company. I would like to thank Joe for his contribution to the Company as its Chairman over the past seven years and wish him well with his future plans. Since his appointment in 2002, the Company continued to grow successfully and profitably and it is well placed to continue its role and responsibility as a key national asset of the Irish economy.
I would sincerely like to thank all of our staff for their commitment and contribution to the Company. I would also like to thank the Board of Directors for their significant advice and support. Their contribution to the governance of the Company continues to ensure that we remain a national resource playing a hugely positive role in the life of the City and that of the State’s economy and ensures that, we are here, we are near and importers and exporters can depend on us.
Enda Connellan
Chief Executive
26 March 2009