CEO Statement

A strong performance despite the recession

Despite the sharp contraction of economic activity in 2009, CMP is able to present a satisfactory set of results. CMP reports an operating profit of SEK 128.2 million on sales of SEK 732.9 million (784.3). Sales were down 7 per cent on the year before, which must be seen as marginal, especially in a year where freight volumes in the Baltic Sea region are thought to have declined by 20–25 per cent. Our own freight turnover fell by 17 per cent compared with 2008, with the biggest declines seen in car distribution and ferry traffic.

Yet, despite this, several of our business areas performed strongly. Our cruise ship business even set a new record in 2009, with 330 cruise ships carrying 677,000 passengers calling at Copenhagen. Another strong area was transit oil, which gave a strong boost to volumes in our liquid bulk operations in Malmö.

Improved resource use

Our performance in 2009 should be viewed in the light of the very weak end to 2008. Freight volumes also continued to decline in 2009. This trend was not broken until the autumn, when we noted a gradual stabilisation in demand. To adjust to the weak demand, CMP was forced to launch a cost-cutting programme in the spring, which also involved reducing the number of staff. The cutbacks affected both white-collar and blue-collar workers and resulted in a reduction of staff by 13 per cent in 2009.

In the spring organisational changes were implemented that have improved resource use in and among CMP’s corporate functions and business areas. This means that we are now using technological, human and economic resources more effectively and in a way that benefits the whole organisation. For the same reasons, we have opted for outsourcing solutions in certain areas, including internal and external communications as well as operations units in IT. Together, these measures will strengthen CMP’s competitiveness at a time when the economy appears to be stabilising and demand is strengthening gradually.

A leading cruise destination

The strong performance in our cruise ships business is encouraging and has consolidated Copenhagen’s position as the largest and most popular cruise destination in northern Europe. Despite the relatively short season, stretching from April to September, cruises remain one of our fastest growing business areas, with a growth rate of around ten per cent since 2005. We work continuously to develop this concept, both in terms of service provision and infrastructure. In 2009 improvements were made to our cruise ship terminals in order to improve access. We are also working on expanding our communications activities for cruise traffic. This will benefit various tourist industry operators in Copenhagen, who are working to make the city an attractive destination. I would also like to highlight our longer-term ambition, which is to ensure that new, ultramodern cruise ship quays are built in Copenhagen and completed in time for the 2013 season.

New customers and increased freight volumes are constantly on our agenda, and right now a lot of our attention is focused on Prøvestenen in Copenhagen and the Northern Harbour in Malmö. At Prøvestenen we aim to expand primarily in our liquid and dry bulk operations, and in 2009 we signed new, important agreements with customers, including an agreement on recycling. In 2010/2011 further space will become available at Prøvestenen, enabling us to conclude additional partnerships with new customers that offer attractive freight volumes over quays.

Focusing on the Northern Harbour

Our largest development project, however, is the Northern Harbour in Malmö. Here CMP and the City of Malmö will establish a new transport and logistics hub with support from the EU. In the initial stage, which began in spring 2009, CMP will build three port terminals in the Northern Harbour. The cost of the investment is about SEK 900 million, and once these facilities are taken into use in 2011 we will be able to handle five times more goods than today. The Northern Harbour is being built with tomorrow’s logistics solutions in mind, where intermodality is a key word. Simply put, intermodality involves bringing together ship, rail and lorry traffic in a way that speeds up and streamlines the goods handling process. Malmö’s Northern Harbour will thus strengthen our long-term competitiveness and enable us to add more value to CMP and build a strategic location in the Öresund region. Yet I would like to stress that we already offer intermodal solutions, notably in our partnership with TX Logistik, where CMP has become a hub for TX’s “combi” traffic from the continent. Goods are unloaded from ships onto trains in a business that is growing at an impressive rate.

This is a good example of the type of customer partnerships that we seek to achieve, where long-term relationships and profitability for both parties are the guiding principles. By creating clear added value for us and our customers, we build a strong foundation for the growth and development of CMP. This, then, is the recipe for success in our expansion on both sides of the Sound.
Another area that I would like to tie to our expansion is our long-term approach to environmental issues. We have achieved a lot in this field, but unfortunately have not been very good at telling people about it. This year’s annual report contains a separate section on the environment, which gives an overview of the key focus areas in our environmental activities. For 2009 I would particularly like to draw attention to our EcoDrive activities, which are aimed at reducing diesel emissions. Also in 2009, CMP in Malmö received an environmental permit for port operations under the Swedish Environmental Code. The environment is a key factor for our future development, where sustainable solutions in technology, infrastructure and services will contribute to our growth.

Finally, I would like to say a big thank you to our customers and employees for 2009, a year that proved to be challenging in many ways. In view of this, I think we succeeded in responding quickly and appropriately to the new situation, which has put us in a good position to continue our strong performance.

Johan Röstin

CEO Copenhagen Malmö Port