Ports' £8.2m loss shows impact of pandemic on island

Monday 12 July 2021

Another example of the deep impact of the pandemic on Jersey has come with the publication of Ports of Jersey’s results for 2020.

After five years of continuous growth for the taxpayer-owned company running the Airport and Harbour, Ports’ income fell by 38% and it made a £8.2m loss compared to a £12.4m profit in 2019.

The Airport was particularly badly hit, with income falling by 50% to £15.6m. The impact was less severe at the Harbour, where boats continued to supply the island, with income falling by £14.5m, a 16% fall.

Passenger numbers at the Airport and Harbour fell by 76% and 87% respectively compared to 2019.

Ports was forced to reduce its workforce by 85 people – a quarter of the total. The company say this will reduce its operating costs by £5m a year, a 20% decrease,  although there was a £3m one-off cost to fund the voluntary redundancy and early retirement schemes.

The pandemic not only hurt Ports but also its partners – airline Flybe was an early casualty in March last year and its food and drink operator Casual Dining Group called in the receivers last July. 

The company behind the Jersey Aero Club also went into administration last May.

Pictured: With the 1937 terminal saved from demolition, Ports is reevaluating its plans for the Airport.

Capital spending at the Airport and Harbour was also a casualty of covid-19, with Ports deciding early to put all non-essential spending on the back burner in order to preserve cash. 

A rethink at the Airport was also prompted by a decision by the Island’s aviation regulator in February to rescind an instruction to remove the 1937 building, much to the joy of heritage campaigners. A new ‘master plan’ of development at the Airport will be produced by the end of the year.

Although ending 2020 debt-free, Ports secured a £40m 'overdraft' last year to fund future investment and maintain liquidity when required.

The salary and fee levels paid to Ports’ board members were unchanged from those in 2019 (£200,000 and £170,000 respectively). However, both gave up any performance-related bonuses last year.

A pay increase for most other employees had been agreed and implemented before the impact of the pandemic became apparent.

Despite its tough year, Ports did not receive any taxpayer support during the year, although it did receive a £1.7m tax credit in recognition of its losses. This was slightly less than the tax it paid in 2019.

Pictured: Ports of Jersey CEO Matt Thomas.

Speaking about the results, Ports CEO Matt Thomas said: “The pandemic has had a significant financial impact on the company. Business volumes have been dramatically impacted by the restrictions on travel which in turn significantly reduced our revenues.

“Having reached a 25-year high in 2019, passenger numbers at the Airport and the Harbour fell significantly while in comparison, freight and fuel volumes were relatively less impacted.

“We have carefully managed our financial resources to minimise our cash outgoings. Our employees have been creative and agile, adapting shift patterns, adjusting the terminal opening hours, reducing and deferring any non-essential spending.”

Mr Thomas praised Ports’ employees for their “tremendous” response to the pandemic, which included giving more than 50,000 hours of time to support other Government agencies.

Chief Financial Officer Andrew Boustouler added: “The disproportionate impact of aviation and maritime sectors, has resulted in an £8.2m EBITDA loss. 

“The majority of the reversal has been driven by the diminished income at the Airport, which returned a £10.5m negative EBITDA at year end compared to a contribution of £7.9m in 2019. 

“While we anticipate that it will be several years for passenger volumes to recover to 2019 levels, we recognise the importance of connectivity to the Island and are pleased that operators retain confidence in the Island and that new agreements have been put in place with Blue Islands, Jet2 and Logan Air to start to replace lost capacity.

“The Harbour maintained a profitable position, albeit at a significantly lower level than experienced in the prior year. We recognise the importance of a diversified income base and are continuing to invest in projects to support this including within Marine Services and Marine Leisure.”