The Port of Salalah, the primary transshipment hub in the Sultanate of Oman, experienced a notable 17% decrease in container throughput handled in the first quarter of this year. This decline, which saw volumes at the Container Terminal drop to approximately 878K TEUs in Q1 2024 from 1.056 million TEUs in the same quarter of 2023, was attributed to various factors, including ongoing disruptions in maritime shipping through the Red Sea.
While revenue saw a slight increase of 1.2% to RO 18.446 million compared to RO 18.222 million in Q1 2023, net profit after tax fell by 28% to RO 846K by the end of Q1 this year, down from RO 1.170 million in the previous year.
Bart Van De Graaf, the Chief Financial Officer of Salalah Port Services Co SAOG, stated, "The decrease in container terminal throughput in Q1 2024 compared to Q1 2023 is a result of the Red Sea issue and capacity constraints related to the ongoing upgrade." These remarks were made in the company's initial unaudited and unapproved financial results for Q1 2024, which were submitted to the Financial Services Authority (FSA) on Monday.
The Red Sea crisis, now in its fifth month, was initiated by Yemen's Houthi movement, which began targeting merchant ships owned or operated by Israeli companies or involved in transporting cargo to and from Israeli ports. The Houthis are striving to pressure Israel and its Western allies to halt Tel Aviv's ongoing genocidal assault on Palestinians in occupied Gaza.
Since the initiation of the Houthi action in November, numerous containerships and cargo vessels have been opting for longer maritime routes around the Cape of Good Hope, bypassing the Suez Canal and Red Sea, in search of relative safety. Unfortunately, amidst this shift, Salalah Port, which serves as the first major port of call for vessels exiting the Red Sea and Gulf of Aden, has often been overlooked.
To compound matters for Salalah Port, its Container Terminal is currently undergoing an upgrade as part of an initiative to accommodate the world's largest containerships. This upgrade includes the installation of up to 10 new container gantry cranes, which are among the largest of their kind globally. By the first quarter of 2025, upon completion of the upgrade, Salalah Port's container capacity will increase to 6 million TEUs, while also strengthening its ability to meet the evolving demands of the maritime industry.
On a positive note, the general cargo sector experienced a 14% increase in throughput during the first quarter of 2024, reaching 5.763 million tonnes compared to 5.039 million tonnes in the previous year. This growth can be attributed to the rise in handling dry bulk cargoes, as highlighted by the Chief Financial Officer.
