Economic-Financial Situation

The rest of the turnover, with €5.16 million invoiced, was made up of revenue from tariff services, which were up 15.16%, mainly due to the hike of the works management tariff, as the result in the increase of works implementation with respect to the previous year and use of dredging product enclosures by the concessionary holders.

67.95% of the net amount of the turnover was down to the usage rates and tariffs, where the situation of the traffic is more directly reflected and where apart from volume, other variables such as the nature of the freight, the form of presentation, the types of vessels and the stopovers or the wharves used are influential. The remaining 32.05%, which is more fixed, are from the occupancy and activity rates related to the port public domain, even though the activity rate related to that occupancy in those concessions, such as the freight terminals, are also affected by the traffic. The user charges, more related to port traffic, dropped by 9.04%, down to €23.65 million compared to €25.99 million in 2019, but remaining at 9.74% over the forecasts for the year, which take into account the effect of the Covid-19 pandemic when the application of discounts and reduction coefficients were taken into consideration but which were not implemented due to the failure to approve the Budget Act.

The activity and occupancy charges related to the Port Public Domain totalled €13.72 million, 4.10% down on the €14.31 million invoiced in 2019. The figures were negatively impacted by the conditions established in Legislative Royal-Decree 26/2020, of 7 July, regarding economic recovery measures to deal with the impact of COVID-19 in the areas of transport and housing.

The Other Operating Income heading (€3.59 million) was up 32.35%. Special mention should be made of the increase in the invoicing due to failure to meet minimum traffic, with items for 2019 having been invoiced and the filling of different services, particularly the property tax (IBI) settled by Huelva City Council for assets of concessionary holders to which that amount was rebilled.

Apart from the aforementioned income, special mention should be made of the financial income which includes the income generated by cash positions, which were very low during 2020, regarding the available cash and the performance of previous years and, also included late, surcharge and deferrals interests, interest received from Puertos del Estado for T3 final rulings or loans to employees. With respect to the first heading, they have been negatively affected by the drop in interest rates with which the financial entities remunerate their liabilities, as the result of the European Central Bank’s monetary policy to stimulate the economy by seeking to inject more liquidity into the financial system. If the return of inflation and commissions on available balances are added to the low interest rates, they will be a loss in purchasing power, which will be difficult to counter given the difficulties to assume risks facing the public administration in general and the Port Authority in particular.

As regards the operating costs generated, including depreciations, they came to €43.99 million, compared to the €42.46 million in 2019, which was up 3.63%, mainly due to the repairs and upkeep headings, which include the maintenance of the new works being accepted. Furthermore, some unforeseen circumstances have had to be included, particularly a railway accident that will be passed on and the customer insolvency provisions, which have been aggravated by the pandemic crisis.

With respect to the approved budget, the Staff Costs heading was cut by 2.20%, down to the failure to cover the places envisaged, and the Other Operating costs heading was down 14.17%, with that difference due to the non-execution of planned actions, such as upgrading the Tharsis Wharf.

It should be noted that the interport compensation fund contribution was €1,349,000.00, while the amount received was €268,000.00, resulting in a net contribution of €1,081,000.00, which appear under Operating Costs.

The pre-tax result stood at €6.57 million, compared to €10.80 in 2019. However, taking into account the Corporation Tax provision of €2.87 million in favour of the Port Authority, which has changed regime this year and which includes tax return credits for future years, the final profit for the year stood at €9.45 million, compared to €10.78 million the previous year.

The target annual profitability was 2.80%, rather higher than the 2.69% of the previous year, despite the drop in profits for the year, due to the exclusion of the income and costs distorting the result.

The cash ratios show that there is an excess capacity to meet the debts, in particular, the immediate cash ratio to cover the current liabilities was 7.22, when the recommendable would be to place it between 0.5 and 1, where the available cash levels would be sufficient to meet liabilities in the short-term, without exceeding more than what was necessary, to avoid idle resources. Such a high ratio is due to the available cash being placed in the short-term as there are no long-term financial products that meet the requirements of the Port Authority. Available or short-term positions accounted for €128.31 million of the €157.42 million cash at the end of 2020. During 2020, where the resources from the operations stood at €19.92 million and the investment was €41.20 million, the working capital fell by €14.41 million, remaining at a high level of €133.05 million.

The operating cost/income ratio was 85.71% in 2020, discounting the compensation fund and insolvencies. Taking into account the depreciation of the new investments made, this ratio will tend to increase in coming years. However, the EBITDA, which was down 11.61%, will remain at similar levels during the years included in the Business Plan, thus guaranteeing financial stability.

With that in mind, it should be noted that the Balance Sheet provides a very robust equity and financial image. The Fixed Assets were fully funded using Equity and there is no indebtedness either in the long or the short term that does not result from the normal operating of the Company. The company is meeting its payment commitments without problems, with the existing debts arising from the normal operating of the activity. In that regard, it should be noted that the Port Authority meets the average supplier payment period of 30 days established in the legislation to combat late payments.