KW reports 22% increase in six months net profit attributable to shareholders

August 16, 2021

Kingston Wharves Limited (KW) for the six months ended June 30, 2021, reported revenue of $3.91 billion a 17% increase when compared to $3.35 billion recorded for the corresponding period of the prior year. Revenue for the second quarter grew 40% to $2.06 billion (2020: $1.48 billion); as both the Company’s ‘Terminal Operations’ and ‘Logistics Service’ segments reported increases.

The ‘Terminal Operations’ grew by 13% over the corresponding period of the prior year to a total of $3.05 billion relative to $2.69 billion last year. Management noted, “The results represent a rebounding of the segment, driven by a marked increase in transhipment motor vehicle moves and growth in the bulk and breakbulk business. The growth in these cargo types served to offset the slower recovery pace in other areas, primarily containers which continue to be affected by global supply chain challenges sparked by the COVID-19 pandemic.”

The company’s ‘Logistics Services’ grew 27%, to total $1.25 million, up from $980.21 million. The company highlighted that the “The strong performance of this division reflects the realization of gains from ongoing capital investments and systems improvements made to expand service offerings and improve overall efficiency. Of particular note is our project of digital transformation which allows for remote payment, cargo traceability and clearance as well as our improved warehousing facilities.”

Cost of sales rose 11% to a total of $1.99 billion (2020: $1.79 billion). Nonetheless gross profit grew by 23% for the period to total $1.93 billion relative to $1.56 billion recorded a year ago. Gross profit within the second quarter rose 67% to close at $1.05 billion compared to $631.59 million booked for the quarter ended June 30, 2020.

Other operating income contracted year over year, to $264.87 million (2020: $330.15 million). Administrative expenses rose 5%, amounting to $609.16 million relative to $582.03 million for the same period last year.

As such, operating profit closed the period at $1.58 billion, 21% more than the prior year’s corresponding six months period of $1.31 billion. Operating profit for the quarter improved 57% to $903.80 million versus $576.69 million in 2020.

Finance Costs for the year declined 11%, to close at $69.69 million for the period relative to $78.32 million booked for the same period in 2020.

KW’s profit before taxation rose by 23% to $1.51 billion for the period in contrast to the $1.23 billion in 2020.

Income tax expense for the first six months increased by 26% to $215.28 million compared to $171.21 million for the corresponding period in 2020. Profit for the six months moved from $1.06 billion to $1.30 billion, a 22% growth year over year.

Net profits attributable to shareholders for the six months rose by approximately 22% to total $1.28 billion relative to $1.04 billion in 2020. Second quarter net profit attributable to shareholders improved 49% to close at $728.03 million (2020: $490.12 million).

Earnings per share for the six months ended June 30, 2021 amounted to $0.89 (2020: $0.73), while for the quarter the EPS was $0.51 (2020: $0.34). The trailing earnings per share EPS totaled $1.73. The total number of shares used in the calculations amounted to 1,430,199,578 units. KW stock price closed the trading period on August 13, 2021 at $47.71 with a corresponding P/E ratio of 27.63 times.

Management noted, “Nearshoring is a growing logistics industry phenomenon; one of the paradigm shifts in the COVID-19 global economic environment where manufacturers are diversifying their supply chain sources and seeking warehousing and product finishing solutions closer to markets. Kingston Wharves is well positioned to capitalize on these developments, having made crucial investments over the last five years in construction and acquisition of warehousing facilities to build-out a fuller suite of logistics services.


Balance Sheet Highlights:

As at June 30, 2021, the company’s assets totaled $39.61 billion relative to $32.87 billion a year ago, an increase of 20%, which was driven mainly by an increase in ‘Property, plant and equipment’ to total $27.78 billion from $22.38 billion twelve months earlier. The company also booked ‘Short term investments’ of $7.20 billion relative to the $5.64 billion reported the prior year.

Shareholders’ Equity amounted to $33.64 billion compared to equity of $27.27 billion reported as at June 30, 2020.  The Company now has a book value per share of $23.52 (2020: $19.07).



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.