HAGÅTÑA (The Guam Daily Post) — On Oct. 5, The Port Authority of Guam received positive financial news as Moody’s Investors Service issued a Baa2 credit rating for fiscal year 2022, for the third year in a row, the island’s seaport announced in a news release.
This rating was based on the Port’s credit strengths for the fiscal year, the Port said in the release. Moody’s report highlighted the following:
Very stable revenue profile
The port’s credit is supported by a very stable revenue profile, which has proven resilient through the coronavirus pandemic. Despite an effective closure of the island’s tourism economy, the port’s operating revenue between 2020 and 2022 averaged $55.8 million, in line with pre-pandemic figures.
Healthy liquidity
The Port Authority’s liquidity position is healthy. Fiscal 2022 financials show unrestricted cash and cash equivalents of more than $33 million, with unrestricted and discretionary reserves of $57.5 million; days cash on hand for 2022 was 429 days, above the 361 in 2021. The port has held more than 300 days cash on hand since 2016, a trend we expect will continue at least through the outlook period.
Solid debt service
The debt service coverage for the Port is solid and expected to remain around 2.7x on the net revenue basis.
Credit strength
The Port derives credit strength from its role as the sole commercial port in Guam, handling around 90% of the territory’s imported cargo and a significant portion of military cargo. The Port of Guam is the only port in the Micronesia region that has the infrastructure and equipment required to service container vessels with a capacity of up to 4,000 TEUs (twenty-foot equivalent units). The Port faces limited restrictions to accommodate future growth related to the military buildup. The port’s capacity limit is around 200,000 containers; in fiscal 2022, the port handled just over 89,000 containers, in line with volumes over recent years
Quick Mawar recovery
We’ve noted in prior reports that the Port is exposed to weather-related events that could affect revenue-generating activities. In late May, Typhoon Mawar shut down Port activities for several days, though early and prudent preparations limited the extent of damage, with sustained damage quickly remediated by the Port.
Moody’s release is just more good news for the port on the financial front, the Port said in the release. On Sept. 29, S&P Global Ratings released its rating maintaining its outlook for the Port at stable and affirmed its “A” long-term rating on the agency’s outstanding series 2018 Port Revenue Bonds.
“In spite of all of our accomplishments these past 4-1/2 years, there is still so much more that needs to be done to keep the Port 100% operational,” Port General Manager Rory J. Respicio said. “Since Day 1, we have been cleaning up the sins of the past and still manage to bring financial stability, improved vessel operations and high employee morale; in short, we are ushering in a higher level of excellence, as affirmed by this report as well as the recent report by S&P.”
The Port Authority of Guam is seen Wednesday, June 28, 2023, in Piti.
