The current thesis aims to outline the financial profile of the ports of Patras and Igoumenitsa and provide a valid comparison between them for a period of five years. The financial analysis of the two ports, one in Patras and the other in Igoumenitsa, was carried out using ratios, according to the data published in the financial reports of the Greek Port Authorities Ltd. In the fourth chapter, the financial analysis of the ports is developed. of Patras and Igoumenitsa via indexes.
Finally, in the fifth and sixth chapters, the conclusions are given, along with some proposals for the economic recovery and better functioning of the aforementioned ports.
Introduction
Identifiers of ports and competitiveness
- Definition of competitiveness
- Historical overview of ports (Patras – Igoumenitsas)
- Privatization of Ports
- The modern role of the harbor – competition and competitiveness
The port has played an important role in the city's economic, social and political life. Since that year, the first historical data on the creation and incorporation of the operation of the port of Igoumenitsa were shown. In addition, the road passes from the southern coastal section of the municipal unit to the port of Igoumenitsa.
In the 1990s, the first privatization started in the ports of the developed countries and quickly expanded to the rest (Rugman, & Verbeke, 1993).
Competitiveness and Port Areas
The economic importance of ports and maritime transportations
In this way, the port can have a positive or negative impact on the development of the local economy either mainly by operating conditions or by its costs (Scherer, 1994). The port, as part of the transport chain that connected sea and land, means of transport cover the functions of freight transport and temporary storage. In order to perform these functions, it is necessary to provide anchoring facilities that enable the safe entry of the ship into the port, platform facilities, storage areas, catchment connections as well as competent personnel and equipment to guide the boats and movement of the cargo (Chlomoudis, 2005).
A typical example is the MOTORWAYS OF THE SEA programme, which will initially operate as part of the two programs mentioned above (Qianwen, 2010).
The effects of port competition
The container, by facilitating the physical movement of goods by many modes of transport, has made container ports merely one of many links (or nodes) in an intermodal (or logistics) chain. In order for a port to meet the demands of shippers, a specific business plan is required, which will take care of all of the above. However, this strategy is very risky, as a company's use of the station can be abruptly terminated if trade routes change or even if a competing port offers a cheaper or better service package.
In addition, other shipping companies are likely to avoid sending their cargo to a terminal where a competitor has preferential treatment, resulting in a loss of traffic to other neighboring ports and the port's dependence on the preferred carrier.
Consequences on port competition
This is due to the fact that carriers no longer have to deal with each port at which their cargo needs to be unloaded; instead, they deal only with the central port, which is used as a transshipment point, responsible for onward transportation of containers to the rest of the ports. The latest category of oversized ships requires the modernization and technological development of ports to increase the efficiency of transportation. In some cases, labor regulations, union size, and compensation plans were the same as those applicable to trucking.
Additionally, union labor regulations make it difficult and expensive to work extra shifts.
Development of methodologies for calculating port competition
These factors lead to a competitive advantage from either cost control or port product diversification. Optimizing port capacity is a fairly complex issue that depends on many variables, including some that directly affect port competitiveness. All the above factors have a significant effect on the volume of flows that can approach the port and its terminals.
To summarize, the competitive position of the port depends on the factors that influence the choice of carriers and shippers.
Development of economies of scale in ports
This new form of intervention allows the good performance of the port to be the main success factor for the port (Chlomoudis, 2005). In conclusion, the issue of competition and the factors that shape it are managed by both the Port Authority and the Terminal Operator with similar common or individual strategies. In other words, on the one hand, the port is required to act as a competitive link within the transport chain (with the main responsibility of the Terminal Operator) and on the other hand to manage a complex and fluid local, national and external environment. global (with the main responsibility of the Port Authority) (Pardali, 2007).
SWOT Analysis for the ports of Patras and Igoumenitsa
The long tradition of maritime activities in Greece has contributed to the building of an experienced workforce and sufficient infrastructure, both readily available for the formation of a crew and the delivery of support services (Vlachos, 2017). The geopolitical position of Greece in the Mediterranean gives significant advantages to the Greek ports and increases their role in the global transit trade, especially compared to the Balkan and Black Sea countries, which are practically inland to the ports of Patras and Igoumenitsa (Kavussanos&Visvikis, 2018) ). Wide coastal shipping network serving the needs of the population on the islands with sufficient frequency carrying both passengers and goods (Stopford, 2018).
Lack of central planning and organization results in ports operating without specialization and in infrastructure proposals without any clear potential for commercial leverage (Vlachos, 2017). Strengthening the role of Greek ports as a "gateway" to the Balkan and Black Sea countries. Invitation to the private sector as well as private equity to collaborate on the development of the ports, promotion of e.g. completion of superstructures and equipment and modernization of existing operations.
The specialization of ports based on objective criteria, such as their geographical location, their connections with trans-European transport networks, the ability to carry out combined transport as well as the approval of development plans according to the proposal for specialization (Profilidis, 2016). National and European strategies promoting intermodal transport, combined with investments in ports and freight terminals (Kavussanos&Visvikis, 2018). The impossibility of intervention to complete the inadequate port infrastructure, especially in relation to large passenger ships such as cruise ships, which limits the number of ship visits (Profilidis, 2016).
Lack of comprehensive national policy on ports, resulting in the absence of a clear direction of action and specialization of development projects. Lack of central planning, which can give rise to wasteful competition between neighboring ports or the inability to meet a particular need, and high costs for berths and port services (Pazarzi, 2016).
Financial analysis using ratios
Profit and return ratios reflect the company's ability to generate profits using the available resources. It also compares the profit generated with the total revenue, the fixed assets and the investment in the business. Return on total capital, this ratio reflects the percentage profit the invested capital generates for the company.
Return on total capital = Net profit before interest and tax / Average asset value Net return on capital, this ratio reflects the profit generated by the management of the company using the available assets. This ratio measures the return on the company's total assets and allows us to assess the efficiency of its operations. This ratio reflects the company's ability to survive financially and attract investment funds and "reward" them accordingly.
Operating efficiency, this ratio reflects the ability of the company's management to generate revenue, which means that they are using the company's resources optimally. A high gross profit margin indicates a company's ability to make economical purchases and sales at high prices. If the leverage ratio is above 1, it means that the use of loan capital has a positive effect on the company's profit and generates a profit.
If it is equal to 1, it means that the use of loan capital has no effect on the company's profit and does not benefit the company. If it is below 1, it means that the use of loan capital has a negative effect on the company's result and that the company is in debt.
Port of Patras ratios analysis
Conclusions
For the port of Patras, this change over the years is generally positive, and appears to be after 2015. Regarding the change in the stock turnover rate for Patras port, it is worth mentioning that from 2013 to 2016 it is positive is, while until 2017 there is a downward trend. Regarding the change in the debt ratio, it is almost zero over the years for the port of Igoumenitsa, while for the port of Patras there are several fluctuations.
Regarding the change in the capital structure index for the port of Igoumenitsa, it is generally positive, except from 2015 to 2016, when the index changed negatively, while for the port of Patras it is observed to be insignificant and stable over time. Moreover, according to the results of this study, the port of Patras has over-leveraged to a negative point since 2017, and the financial leverage ratio has been adjusted to -0.20%. Finally, the financial leverage ratio for the port of Igoumenitsa shows a negative value on average.
Therefore, in 2017, the company over-indebted to a negative point, and in years with a negative trend of change, the indicator is adjusted to -0.20% on average.
Proposals
Therefore, constant interventions to improve and upgrade infrastructure and procedures are imperative, for example by creating modern passenger terminals and focusing on external port works such as seawalls and breakwaters. To all of the above we must add combined transport, which means that in addition to the constant upgrading of the port infrastructure, there is also a need for interventions in highways and railways to make the port accessible where it is not already. The utilization of the ports for combined transport must be accompanied by coordination and interconnection with corresponding networks abroad as well as their respective pricing policies.
Fundamental issues in strategy: Towards a dynamic theory of strategy, Fundamental issues in strategy: a research agenda for the 1990s, Harvard Business School Press, Η.Π.Α. Efficiency Analysis of Container Ports and Terminals, A thesis submitted for the degree of Doctor of Philosophy from University College London, Center for Transport Studies Department of Civil, Environmental and Geomatics Engineering, University College London.