Phnom Penh Autonomous Port (PPAP), which operates the capital’s river port, reported a decline in container traffic during the first quarter of the year, raising questions about the newly listed company’s ability to meet its double-digit revenue and earnings projections – though analysts say it is too early to worry.

Container throughput at the port fell to 32,296 TEUs, or twenty-equivalent units, during the first quarter of 2016, down from 34,647 TEUs during the same period a year earlier, according to data released by the company and verified yesterday.

While container traffic in January grew 10 per cent year-on-year, in February it was down by 11 per cent. The decline was most pronounced in March, with 8,864 TEUs passing through the port, down 20 per cent over the same period.

Eng Moniroth, head of PPAP’s statistics office, attributed the decline in container throughput to three factors, namely reduced barge operations during the Chinese New Year celebrations, the relocation of some garment factories to other countries, and the economic slowdown in China.

“In China, there are economic issues that have [reduced consumer demand] and made some factories cut down their orders,” he said.

PPAP has enjoyed strong revenue and earnings growth in recent years on the backbone of continually growing container traffic. Its port handled 144,813 TEUs last year, up 8.3 per cent year-on-year as the result of surging exports, particularly rice and construction materials.

Total revenues climbed 14.5 per cent to reach the equivalent of $15.3 million in 2015, with net profit surging nearly 53 per cent to $3.2 million, according to a research note by Yuanta Securities (Cambodia), the underwriter of PPAP’s $5.2-million initial public offering.

In a disclosure document released last October, PPAP’s management projected that container throughput would grow by 13.3 per cent in 2016 to 162,000 TEUs. The company’s forecast of “15-20 per cent growth in revenue from 2014 onwards” was closely linked to this rising throughput.

Despite a two-month slump in container traffic, Moniroth remained confident that container shipments would recover to end the year in record territory.

“Our expectation for growth for the rest of the year is over 10 per cent,” he said.

Sim Dara, an equities analyst at Yuanta Securities, said it was “too early for investors to get worried” that PPAP would not meet its projections.

“Monthly fluctuation is not a good indicator of whole-year performance,” he said.

He noted, for example, that in March and April 2015, PPAP’s container throughputs fell by 3.5 per cent and 14.6 per cent year-on-year, respectively. Yet the port ended the year with total annual throughput up 8.1 per cent year-on-year, and revenue up 14.5 per cent.

However, PPAP could see its 2016 revenue further eroded by Prime Minister Hun Sen’s announcement on Sunday that the port operator would reduce its container loading and unloading fees by 5 per cent. Container-handling fees typically account for more than 75 per cent of PPAP’s total revenue.

Hei Phanin, director of planning and marketing at PPAP, said the impact of the reduced fees would be minimal as the discounted rate would only apply to one particular type of container operation, LOLO (lift-on, lift-off).

In fact, she said, the fee reduction could end up driving revenue growth, as it makes Phnom Penh a more attractive destination for shipping companies.

“It’s not a bad thing for PPAP as the goal is to make the port more competitive [compared to other ports in the region,” Phanin said. “And if PPAP is more competitive, it will receive more traffic, which will increase its revenue.”

PPAP shares closed down 100 riel at 5,400 riel on the Cambodian Securities Exchange yesterday.