KW reports 33% increase in six months net profit

Kingston Wharves Limited for the six months ended  June 30, 2017 booked revenue of $2.94 billion, a 19% increase when compared to $2.47 billion for the same period last year, while revenue for the second quarter grew 22% to $1.55 billion (2016: $1.27 billion). This as both the company’s ‘Terminal Operations’ and ‘Logistics & Ancillary Service’ segments reported increases.

  • The ‘Terminal Operations’ which accounted for 78% of total revenues, increased 19% year over year to a total of $2.30 billion relative to $1.92 million last year. According to KW, “The key drivers behind this strong performance were diverse and included growth in container handling, motor units and break bulk operations, which underpin the multi-purpose nature of our terminal services.”
  • The company’s ‘Logistics & Ancillary Services’ grew 17%, to total $643.02 million, up from $549.66 million. The company outlined that, “this was attained primarily as a result of continuous expansion of KWL’s service offering and a widening of its customer base, as well as improved operational efficiencies gained through increased use of technology to manage our warehousing operations and security services.”

Cost of sales rose 8% to a total of $1.52 billion (2016: $1.41 billion).  Nevertheless, gross profit grew by 33% for the period to total $1.42 billion relative to $1.07 billion recorded a year ago. Gross profit within the second quarter rose 49% to close at $758.82 million compared to $510 million booked for the quarter ended June 30, 2016.

Other operating income fell 73% year over year, to total $40.03 million (2016: $148.13 million). Administrative expenses increased by 18%, amounting to $542.62 million relative to $459 million for the same period last year.

As such, operating profit closed the period at $918.26 million, 21% more than the prior year’s corresponding quarter of $756.45 million. Operating profit for the quarter improved 24% to 485.36 million versus $391.81 million in 2016.

Finance Costs for the year declined 42%, to close at $61.50 million for the period relative to $106.59 million booked for the corresponding period last year.

Profit before taxation rose 32% to $856.76 million for the period in contrast to the $649.86 million in 2016.

Income tax expense for the period increased 23% to $106.19 million compared to $86.56 million for the corresponding period in 2016. Profit for the six months moved from $563.31 million to $750.57 million, a 33% growth year over year.

Net profits attributable to shareholders for the six months rose by approximately 34% to total $741.88 million relative to $554.57 million in 2016. Second quarter profit attributable to shareholders improved 47% to close at $409.40 million. (2016: $278.03 million).

Earnings per share for the six months ended June 30, 2017 amounted to $0.52 (2016: $0.39), while for the quarter, the EPS was $0.29 (2016: $0.19). The trailing earnings per share EPS totaled $1.04. The total number of shares used in the calculations amounted to 1,430,199,578 units.

Management indicated, “Kingston Wharves through its self-funded projects continues to strengthen its core services, while building its capacity to serve a wider range of local and transshipment requirements for the loading, discharge and storage of bulk, breakbulk, containerised and automotive cargo. Projects currently underway include the commissioning of on-dock bulk storage facilities, a near-port global automotive center and a terminal resurfacing and rehabilitation program. Prior to the end of the financial year, these initiatives will be further supported by the launch of our Total Logistics Facility. This purpose-built warehousing complex will host Jamaica Customs as well as other service providers in the shipping industry in a single location. It is expected to simplify and make dramatic improvements to the receival, storage and delivery process for shipments of any size into and out of the Port of Kingston which will facilitate growth for the country.”

 

Balance Sheet Highlights:

As at June 30, 2017, the company’s assets totaled $23.94 billion relative to $22.12 billion a year ago, an increase of 8%, which was driven mainly by an increase in ‘Property, Plant and Equipment’ to total $18.27 billion from $16.58 billion. Retirement benefits assets also contributed to the growth in the asset base with a 51% increase to $936.18 million (2016: $619.08 million).

Shareholders’ Equity amounted to $19.04 billion compared to equity of $17.97 billion reported as at June 30, 2016.  The Company now has a book value per share of $13.31 (2016: $12.56).

 

 

 

 

Disclaimer:

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.

2017-08-15T17:18:16+00:00