May 13, 2020

Cargo Handlers Limited (CHL) revenues for the six months fell 12% year over year to $191.37 million versus $216.32 million booked in 2019. Revenue for the quarter contracted 6% to $104.26 million versus $111.45 million booked for the same quarter of 2019. CHL noted this, “was attributable to fewer than anticipated cruise vessel arrivals.”

Cost of sales for period amounted to $5.74 million, in contrast to $8.20 million for the prior year’s corresponding period. As such, CHL recorded gross profit of 185.63 million (2019: $208.12 million). Gross profit for the quarter closed at $100.22 million versus $106.55 million for the same quarter of 2019.

Gain on exchange closed at $9.46 million relative to a loss of $15.17 million recorded in the prior corresponding quarter. Other income for the six months amounted to $75,000 (2019: $400,000).

Administrative expenses recorded a 15% decrease to $13.76 million (2019: $16.12 million), while other operating expenses reflected a decline of 8% to $84.28 million (2019: $92.05 million).

Consequently, CHL recorded an operating profit of $97.13 million, up 14% compared with $85.18 million reported in 2019. Operating profit for the second quarter closed at $55.76 million (2019: $56.99 million).

The company reported finance cost of $912,576 million for the period; this compares to the finance cost of $1.08 million for the same period in 2019. Interest income year to date amounted to $591,124 (2019: $737,661).

Profit before taxation improved to $96.80 million versus $84.83 million booked in the same period in 2019. While for the quarter, pre-tax profits closed at $55.69 million (2019: $56.84 million).

Net profit rose 14% to $84.56 million (2019: $74.11 million) following taxation $12.25 million (2019: $10.72 million). However, net profit for the quarter decreased by 2% to $48.65 million relative to $49.66 million in the previous corresponding quarter.

Earnings per stock unit for the six months amounted to $0.20 (2019: $0.18). The EPS for the second quarter was $0.117 (2018: $0.119). The twelve month trailing EPS amounted to $0.34. CHL stock price closed the trading period on May 13, 2020 at a price of $6.50.

CHL noted, “during the month of March 2020 the country began to experience the effects of the COVID-19 global pandemic on local economic activities. The abrupt suspension of cruise vessel visits into the island brought a premature end to the seasonal cruise ship period negatively impacting revenue derived from baggage handling.”

Additionally, CHL indicated, “as a result of the continued threat posed by the COVID-19 global pandemic and its effect on global trade, we expect to see a sharp reduction in containerized cargo traffic over the ensuing two quarters due to the lack of demand within the hospitality sector; this arising from the suspension of international passenger flights and the temporary shutdown of hotels across the island. A slow-paced return to normalcy within the sector is however anticipated as airlines and hotels begin to strategize their approaches towards restarting operations and rebuilding customer confidence.”

Balance Sheet at a Glance:

As at March 31, 2020 ‘Total assets’ rose by 10% to $608 million (2019: $551.61 million). This increase was primarily driven by ‘Receivables’, which amounted to $183.23 million (2019: $115.74 million).

Shareholders’ equity as at March 31, 2020 amounted to $511.54 million (2019: $452.66 million) resulting in a book value per share of $1.23 (2019: $1.09).

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