KEX reports 23% increase in nine months net profits

Date: April 15, 2019

Knutsford Express Services Limited for the nine months ended reported total revenue of $841.93 million, a 24% or $164.80 million increase when compared with the $677.13 million reported for the same period in 2018. For the third quarter, revenues amounted to $286.82 million, a 24% increase relative to the $231.71 million booked for the corresponding period in 2018. According to KEX, “the increase was due in part to the increased patronage of overseas visitors travelling between our various destinations, in particular to and from Negril where the number of our departures doubled in the quarter.”

Administrative and general expenses for the period grew 25% to total $671.03 million (2017: $535.18 million). Consequently, gross profit for the period rose 20% to close at $170.90 million compared to the $141.95 million reported for the same period a year ago. For the quarter, Gross profit fell by 9% from $41.07 million in 2018 to $37.30 million.

In addition, finance income surged to $9.58 million from $1.53 million in 2018. Finance costs also climbed 33%, to total $22.15 million for the period up from $16.67 million recorded for 2018.

Profit before taxation for the nine months amounted to $158.34 million relative to $128.31 million reported in 2018, a 23% increase year over year. Taxes of $400,304 were incurred this year compared to nil last year.

Consequently, net profit for the period also amounted to $157.94 million, representing a 23% increase over the prior year’s corresponding period net profit of $128.31 million. Net Profit for the quarter however declined by 9% to close at $33.93 million relative to the $37.33 million booked for the corresponding period in 2018. The Company noted this was as a result of, “start-up expenses associated with our subsidiaries -KE Connect and KE Connect US. KE Connect has focused on providing connections and specialized local charters while KE Connect US, which began operations in January 2019, will target charters in South Florida market.

As such, earnings per share (EPS) for the nine months ended amounted to $0.32 (2017: $0.26), whilst earning per share for the quarter amounted to $0.07 (2018:$0.07). The twelve-month trailing EPS amounted to $0.41. The number of shares used in our calculations is 500,000,015. KEX stock price closed the trading period at a price of $12.29 on April 12, 2018.

Balance Sheet at a Glance:

As February 28, 2019 assets totalled $1.02 billion, $360.06 million more than the $661.79 million recorded last year. The increase in total assets was largely due to increases in ‘property, plant and equipment’ and by $291.67 million to total $707.60 million (2018:$415.94 million). KEX noted, “This was as a result of continued investment in coaches and new investments in growth and initiatives to strengthen and diversify of our income stream. These investments include acquisition of commercial real estate for a future logistics development project in Draux Hall, St. Ann and the acquisition of KE Connect US the bus and coach charter company in South Florida. These investments were partly financed by a 5-year unsecured bond issue of $150 million arranged by Proven Wealth.”

Shareholder’s equity closed at $749.16 million (2018: $576.94 million). As such, the book value per share was $1.50 (2017: $1.15).

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