KEX reports 35% decrease in nine months net profits

April 27, 2020

Knutsford Express Services Limited for the nine months ended February 29, 2020 reported total revenue of $925.23 million, a 10% increase when compared with the $841.93 million reported for the same period in 2019. For the third quarter, revenues amounted to $318.04 million, an 11% increase relative to the $286.82 million booked for the corresponding period in 2019. According to KEX, the increase in revenues was due to, “continued demand for our transport services.”

Administrative and general expenses for the period grew 19% to total $797.46 million (2019: $671.03 million). Consequently, gross profit for the period fell 25% to close at $127.77 million compared to the $170.90 million reported for the same period a year ago. For the quarter, gross profit rose by 25% from $37.30 million in 2019 to $46.53 million.

In addition, finance income declined to $5.18 million from $9.58 million in 2019. Finance costsyear to date, also fell 11%, to total $19.70 million for the period down from $22.15 million recorded for 2019.

Profit before taxation for the nine months amounted to $113.26 million relative to $158.34 million reported in 2019, a 28% decrease year over year. Taxes of $10.08 million were incurred year to date compared to $400,304 in the same period last year.

Consequently, net profit for the period amounted to $103.18 million, representing a 35% decrease over the prior year’s corresponding period net profit of $157.94 million. Net Profit for the quarter, however, increased by 7% to close at $36.42 million relative to the $33.93 mill​ion booked for the corresponding period in 2019. 

Total comprehensive income amounted to $105.14 million for the nine months ended February 29, 2020 (2019: $157.94 million)While, for the quarter, total comprehensive income closed at $37.73 million (2019: $33.93 million).

As such, earnings per share (EPS) for the nine months ended amounted to $0.21 (2019: $0.32), whilst earning per share for the quarter amounted to $0.073 (2019: $0.068). The twelve-month trailing EPS amounted to $0.27. The number of shares used in our calculations is 500,000,015. KEX stock price closed the trading period at a price of $7.21 on April 24, 2020.

Management noted that in light of the outbreak of COVID-19, “during March 2020, the Company suspended passenger services on several routes and implemented cost-cutting strategies while maintaining our courier services throughout the island. Notwithstanding, we expect the pandemic to have a negative impact on our fourth quarter results. The Board and management are monitoring the situation closely and will take all necessary steps to resume full passenger services within the government’s stipulated guidelines.”

Balance Sheet at a Glance:

As February 29, 2020 assets totaled $1.18 billion, $155.06 million more than the $1.02 billion recorded last year. The increase in total assets was largely due to an increase in ‘property, plant and equipment’ which rose by $94.13 million or 13% to total $801.73 million (2019: $707.60 million). Other assets and short term investments also rose 72% and 45% respectively to $102.84 million (2019: $59.77 million) and $139.60 million (2019: $96.32 million) respectively. KEX noted that total assets increased due to, “investments in our new Drax Hall development and logistics hub which promises to add improved efficiencies, reduced passenger travel time while unlocking other avenues of earning.”

Shareholder’s equity closed at $844.79 million (2019: $749.16 million). As such, the book value per share was $1.69 (2019: $1.50).


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