Bethel Finance: Ashdod Port salaries total half its revenue

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Bethel Finance news:
The salary cost of Ashdod Port Company Ltd. was NIS 565 million in 2010, half of the port's revenue of NIS 1.14 billion, CEO Shuki Sagis disclosed at a press conference yesterday.

According to the Ministry of Finance's report on top paid public employees (Ashdod Port is a government company), the average gross monthly salary of Ashdod Port employees was NIS 24,557 in 2010, 9% more than in 2009. However, Sagis counters that the high salaries are due to historic labor contracts, which mainly apply to veteran employees who are now close to retirement.

The average salary cost of a veteran employee is NIS 41,393, while the average salary cost of a newer employee is NIS 21,351.

Sagis claims that the salary cost at the ports has only a marginal effect on the cost of living in Israel, asserting that the port fees add no more than 0.5% to the final price of goods. He also called on the government to do everything to promote the privatization of the ports, saying that this was critical to foster efficiency, savings, and level of service.

The initial sale of 15% of Ashdod Port on the Tel Aviv Stock Exchange (TASE) was halted a year ago because of a dispute between the Ministry of Finance and the port's workers committee. The government is now waiting on the results of the privatization of Eilat Port Company Ltd. before again trying to privatize Ashdod Port.

At the press conference on Ashdod Port's business results, Sagis said, "Macroeconomic figures do not herald good news, and there are increasing signs of a decrease in global trade. Shipping companies are in dire straits. We all know about the shape of Zim Integrated Shipping Services Ltd., and its profitability problems are not unique."

Israel's trade with Europe accounts for 40% of Ashdod Port's business. Sagis said that the competition between Israel's ports, following the first stage of the ports' reform in 2005, Ashdod Port narrowed the gap in container shipping with Haifa Port Company Ltd., despite the latter's continued advantage as Zim's home port. Ashdod Port increased its share of Israel's container shipping market from 34% in 2005 to 48% in 2011.

However, in the general cargo category, Ashdod Port's second largest source of revenue, it faces competition from the private Israel Shipyards Ltd. port in Haifa. Sagis estimates that Israel Shipyards cut Ashdod Port's share of the general cargo market from 70% to 66%.

Ashdod Port has enjoyed an unexpected source of income from vehicle imports, due to legislative changes on vehicle's model year. The amendment caused customers to prefer buying models at the beginning of the year, resulting in an inventory 25,000 vehicles at the port, compared with the usual 6,000 vehicles.