KEX reports a 46% decline in six months net profits

January 14, 2020

Knutsford Express Services Limited (KEX), for the first six months ended November 30, 2019,  reported total revenue of $607.19 million, a 9% or $52.09 million increase when compared with the $555.11 million reported for the same period in 2018. For the second quarter, revenues increased by 8% to close the period at $282.67 million versus $262.18 million of 2018. The Company noted that, “this was due to continued demand for our passenger and courier services.”

Administrative and general expenses grew 25% to total $525.94 million (2018: $421.50 million). Consequently, gross profit declined 39% to close at $81.25 million compared to the $133.60 million for the same period a year ago. While, for the quarter, gross profit closed at $23.87 million (2018: $44.68 million).

Finance costs decreased 18% to $12.75 million for the period under review from $15.63 million for the same period in 2018, while finance income fell to $4.42 million (2018: $6.04 million) in the first six months of 2019.

Profit before taxation amounted to $72.92 million, relative to $124.01 million reported for the similar period in 2018, a 41% decrease year over year. After incurring taxes of $6.16 million compared to nil in 2018, net profit amounted to $66.76 million (2018: $124.01 million), a 46% decrease. For the second quarter, KEX recorded net profit of $18.99 million relative to $36.01 million recorded in 2018’s second quarter.

KEX added, “ Our results have been impacted by increases in expenses associated with our new advertising campaign, additional staffing and toll costs associated with new routes.”

As such, earnings per share (EPS) for the second quarter amounted to $0.04 (2018: $0.07), while for the six months the EPS was $0.13 (2018: $0.25). The twelve-month trailing EPS amounted to $0.26. The number of shares used in our calculations is 500,000,015. KEX’s stock price closed the trading period on January 13, 2020 at a price of $10.06.

Balance Sheet at a Glance:

As at November 30, 2019, assets totalled $1.08 billion, $251.99 million more than the $832.36 million recorded last year. The increase in total assets was largely due to increases in ‘property, plant and equipment’ and ‘Cash and Bank Balances’ by $232.75 million and $68.43 million respectively to total $738.96 million (2018: $506.21 million) and $121.17 million (2018: $52.75 million) correspondingly. In addition, ‘Short-term investments’ contributed to the increase amounting to $138.25 million (2018: $95.94 million). This was however,  partially offset by a 66% decrease in ‘Other Assets’ to $49.52 million (2018: $144.96 million).

Shareholder’s equity closed at $807.06 million (2018: $715.23 million). As such, the book value per share was $1.61 (2018: $1.43).

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