Chief Executive’s Review
Trade in 2021
Volumes in 2021 were down by 5.2% compared to 2020 with a larger decline in exports (9.4%) than in imports (2.3%).
More than four-fifths of Dublin Port’s volumes are in the unitised modes and the overall number of containers and trailers were down 3.8% in the year. However, there was a very marked difference between the unitised modes with RoRo volumes down by 9.3% but LoLo volumes up by 10.2%.
The very different trends between the RoRo and LoLo modes and the changes in trading patterns caused by Brexit transformed the make-up of Dublin Port’s unitised business during 2021:
- The overall decline in the number of containers and trailers was small at just 56,000 units ( 3.8%)
- This comprised a substantial decline of 99,000 in the number of RoRo units partly offset by an increase in LoLo units of 43,000
- The decline in RoRo volumes was primarily in accompanied RoRo units (90,000 of the 99,000).
- The net reduction in unitised volumes of 56,000 units resulted from very different outcomes geographically:
- Holyhead volumes down by 167,000
- Volumes on the longer-sea GB routes to Liverpool and Heysham down by 32,000
- Volumes on RoRo and LoLo services direct to Continental Europe - in the range of ports from Rotterdam to Cherbourg - up by 164,000
- Other unitised volumes down by 21,000
- The increase of 164,000 in unitised volumes to Continental Europe included an 88,000 increase in RoRo units to 259,000.
“More than four-fifths of Dublin Port’s volumes are in the unitised modes and the overall number of containers and trailers were down 3.8% in the year. However, there was a very marked difference between the unitised modes with RoRo volumes down by 9.3% but LoLo volumes up by 10.2%”.
Eamonn O’Reilly, Chief Executive
The net effect of these trends on the distribution of Dublin Port’s unitised volumes is that GB routes only accounted for 52% of the 1.4 million unit loads in 2021 compared to 64% of all of the 1.5 million unit loads in 2020.
Elsewhere in the unitised modes, trade vehicle imports grew by 10.9% to 82,000.
Dublin Port remains a large energy port and the four million tonnes of petroleum products imported during 2021 represented about one-third of the country’s total final energy consumption in the year.
The year was very difficult for the port’s passenger business because of Covid-19 and although ferry passenger and tourist vehicle numbers were ahead compared to 2020, numbers were very far behind their pre-pandemic levels. In 2019, there were 1.9 million ferry passengers.
There were no cruise ship calls to Dublin Port during 2021.
Imports/Exports
‘000 gross tonnes |
2021 |
2020 |
% change |
|---|---|---|---|
Imports | 21,217 | 21,714 | (2.3%) |
Exports | 13,723 | 15,150 | (9.4%) |
Total | 34,940 | 36,864 | (5.2%) |
Unitised Volumes
2020 |
2019 |
% change | |
|---|---|---|---|
Ro-Ro units | 962,075 | 1,060,979 | (9.3%) |
Lo-Lo units | 466,737 | 423,715 | 10.2% |
Total units | 1,428,812 | 1,484,894 | (3.8%) |
Lo-Lo TEU | 842,838 | 758,013 | 11.2% |
Trade vehicles | 82,457 | 74,373 | 10.9% |
Non-unitised Volumes
2021 |
2020 |
% change | |
|---|---|---|---|
Bulk Liquid tonnes | 3,938 | 3,871 | 1.7% |
Bulk Solid tonnes | 1,973 | 1,957 | 0.9% |
Break Bulk | 69 | 33 | 112.6% |
Total non-unitised | 5,980 | 5,861 | 2.1% |
Passenger Volumes on Ferries
2021 |
2020 |
% change | |
|---|---|---|---|
Ferry passengers | 845,326 | 832,816 | 1.5% |
Tourist vehicles | 251,938 | 214,700 | 17.3% |
Imports/Exports 2021
In millions gross tonnes
34.9m
Imports: 21.2m
Exports: 13.7m
Unitised Volumes 2021
Total Units
1,428,812
Ro-Ro: .962
Lo-Lo: .466
T4 Roadbridge Project
This new bridge, completed in 2021, crosses Alexandra Road and allows the creation of an integrated T4 freight yard of c. 14 hectares and a tonnage capacity of 7m Tonnes p.a.
Financial Performance in 2021
Notwithstanding the twin challenges of Brexit and Covid-19, turnover in 2021 for the year decreased by only €0.8m (1.0%) to €85.8m from €86.6m in 2020. This reduction was driven by two factors - lower cargo dues as a result of the 5.2% fall in throughput and a reduction in revenues from towage.
Total operating costs in 2021 increased by €7.2m (16.8%) to €50.4m from €43.1m the previous year:
- Depreciation costs (net of grant amortisation) were €2.9m higher in 2021 at €13.4m. This reflects the higher fixed asset base resulting from the Company’s large capital investment programme.
- Pension costs were €0.6m higher at €2.7m
- Reorganisation costs amounting to €1.1m in 2020 were not repeated in 2021.
- Day-to-day operating costs were €4.9m higher at €34.3m compared to €29.4m in 2020. The main driver for this was a higher charge for commercial rates of €3.7m (as a result of Dublin City Council’s part waiver in response to the Covid-19 pandemic in 2020). In addition, payroll costs were €0.6m higher in the year.
Other operating income of €0.7m in 2020 related to an increase in the valuation of the Company’s investment property “P5” located in the Eastpoint Business Park. There was no corresponding increase in valuation in 2021.
Taking the above together, the Company had operating profits in 2021 of €35.4m, 19.8% lower than in 2020.
The taxation charge for the year was €4.0m compared to €5.4m in 2020.
Profit for the Financial Year 2021 was €26.0m compared to €34.2m in 2020 representing a reduction of €8.3m (24.1%).
Given the Company’s focus on delivering a large debt-financed capital programme, maintaining the level of cash profits as measured by EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) is important.
During 2021, EBITDA was strong at €48.8m and the reduction of €5.2m on 2020 was accounted, for the most part, by the council rates waiver of €3.7m in 2020.
Return on Capital Employed (ROCE) for 2021 was 5.5% compared to 7.4% in 2020 reflecting the significant investment in fixed assets during the year. The value of the Company’s fixed assets at the end of 2021 was €670.8m compared to €613.1m at the end of 2020. The movement for the year came from additions of €71.6m offset by depreciation of €13.9m.
The net debt position at year end was €164.2m, up €30.9m on 2020.
EIB loan repayments during the year amounted to €5.2m, reducing total borrowings to €288.2m. Cash balances decreased by €36.2m resulting in the increase of €30.9m in the Company’s net debt position.
Financial Performance 2021
€’000 |
2021 |
2020 |
% change |
|---|---|---|---|
Turnover | 85,769 | 86,596 | (1.0%) |
Operating Profit | 35,417 | 44,150 | (19.8%) |
PBT | 29,959 | 39,689 | (24.5%) |
PAT | 25,995 | 34,251 | (24.1%) |
EBITDA
€’000 |
2021 |
2020 |
|---|---|---|
Operating Profit | 35,417 | 44,150 |
Depreciation | 13,874 | 11,085 |
Amortisation | (490) | (564) |
Other income | - | (665) |
Exceptional Items – profit on disposal of assets | (50) | (40) |
EBITDA | 48,751 | 53,966 |
Net Debt
€m |
2021 |
2020 |
|---|---|---|
Borrowings | 288.2 | 293.4 |
Cash | 124.0 | 160.1 |
Net Debt | 164.2 | 133.3 |
Internal Road Network
A port wide project to upgrade the road network so as to deliver the capacity for traffic volumes projected in Masterplan 2040. The project will complete in 2022.
Outlook for 2022
The last two years – 2020 and 2021 – have been challenging because of the combined effects of Covid-19 and Brexit.
Notwithstanding these challenges, the Company has remained focused on the long-term objectives of Masterplan 2040 and capital investment in nationally critical infrastructure has continued at a high level – €59.1m in 2020 and €71.6m in 2021. This progress has been underpinned by strong cash profits with EBITDA of €48.8m in 2021.
For the coming year, we expect strong growth - in volumes and EBITDA - with continued capital investment in port infrastructure on both the ABR Project and the MP2 Project.
There has been an underlying trend for many decades of long-term growth in Dublin Port’s volumes driven by population increase. We expect to see volumes begin to increase again in 2022 and to surpass the record level of 2019, possibly as early as 2023.
The impacts of Brexit are now established in terms of a fundamental shift in the geographical distribution of unitised volumes away from GB and towards fellow EU member states.
Border controls by State services are operating very efficiently to the extent that the Company is seeking the return of at least half of the 14.6 hectares of port lands given over to facilitate the border inspection operations of Customs and the Department of Agriculture. This is a critical challenge if we are to mitigate the already emerging capacity pinch points.
In the long-term, we need to see all of the border control infrastructure moved out of Dublin Port entirely in a similar manner to the ongoing removal from the port area of cargo-related but non-core activities such as empty container depot operations and haulier yards.
Having seen operations commence in the first site at Dublin Inland Port at the start of this year, we are optimistic that we will see further progress during 2022 at moving more of these port-related but non-core activities from Dublin Port as planned for as long ago as 2014 when we originally published the Dublin Port Franchise Policy.
T4 Roadbridge Project
If the infrastructure we are investing in is to provide the full capacity it is designed to deliver, we will have to see supply chain inefficiencies eliminated and we anticipate during 2022 to make further progress on driving down dwell times in the port’s three container terminals. During 2022, we will further tighten dwell time regimes - where we control them - and we will seek to encourage and influence terminal operators to follow our examples in the leased terminals where we do not.
The following year is also an important year in terms of port pricing with the first increases being applied in port infrastructure charges for unitised goods since the port was corporatised in 1997. These increases are part of a five year pricing strategy published in 2021.
The ultimate required doubling of port throughput per hectare is going to require digitalisation of port operations and we plan to commence a project during the year to begin to make progress towards this goal.
There is a continual focus on long-term planning in the Company and we will work during 2022 to develop the 3FM Project with a target of lodging a planning application with An Bord Pleanála in 2023.
The 3FM Project is the third and final Masterplan project required to bring Dublin Port to its ultimate capacity by 2040. It is designed to deliver a new container terminal with an annual throughput capacity of 360,000 units (612,000 TEU) and a RoRo freight terminal with a capacity of 288,000 units. The 3FM Project is intended to provide 20% of the overall unitised cargo capacity required by 2040 on the one-fifth of port lands on the Poolbeg Peninsula.
“There is a continual focus on long-term planning in the Company and we will work during 2022 to develop the 3FM Project with a target of lodging a planning application with An Bord Pleanála in 2023”.
Eamonn O’Reilly, Chief Executive
3FM Project
In November 2021 the Company launched the 3FM Project, the third and final Masterplan project needed to complete the development of Dublin Port and bring it to its ultimate and final capacity by 2040.
Responding to climate change is at the centre of our plans and we will continue during 2022 to develop adaptation projects to mitigate the effects of sea level rise and of more intense storm events over the next hundred years. These plans will require augmentation of Dublin Port’s two sea walls – the Great South Wall and the North Bull Wall – as part of the co-ordinated challenge shared with Dublin City Council and OPW to protect Dublin City against the now inevitable impacts of climate change.
The decarbonisation of the Irish economy is essential for the country’s response to climate change. We welcomed the ending of exports of horticultural peat from Dublin Port during 2021 and hope to see the ending of the importation of petroleum coke, if not during 2022, then very soon after that.
Imports of petroleum products remain at a worryingly high level but we will, during 2022, take back the first portion of one customer’s oil terminal facilities in the port. This will be redeveloped to provide capacity for the transit storage of unitised cargoes.
Beyond this, we have planning permission from An Bord Pleanála in our MP2 Project to redevelop one of Dublin Port’s two oil jetties to provide more terminal capacity for LoLo trade. We hope to be able to achieve this before the planning permission lapses in 2035. We will continue to monitor energy trends in the country during 2022 and are ready to begin detailed design of this element of the MP2 Project as soon as it appears feasible.
Of all of our objectives for 2022, the most important is to achieve a fundamental change in safety culture throughout Dublin Port. There has been an unacceptable number of fatal and serious accidents in unitised terminals in recent years notwithstanding all of the efforts made to provide safe working places. During 2021, we commenced a collaborative initiative with all seven unitised terminals to try to change the safety culture and to eliminate workplace accidents throughout Dublin Port. We will work determinedly and collaboratively with the terminals during 2022 to achieve this essential objective.
The “we” will include me only until the end of August when I will finish up in Dublin Port Company after twelve busy and enjoyable years. The thing I will miss most is working day to day with many dedicated friends and colleagues in the Company, in Dublin Port and throughout the port industry in Europe and beyond. The Company is in good hands and the plans, people and finance are all in place to realise the ambitious goals set to bring Dublin Port to its ultimate capacity by 2040, 333 years since the first port authority – the Ballast Office Committee of Dublin Corporation was established in 1707.
However much our focus during 2022 will remain on the long-term development of Dublin Port, the year will be dominated by the impacts of the tragedy that has descended on the people of Ukraine.
Eamonn O’Reilly, Chief Executive
25th March 2022