CHL reports 14% increase in six months net profit

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).


Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer(s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view(s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.