KW reports 36% increase in nine months net profit

Kingston Wharves Limited (KW) for the nine months ended September 30, 2017 recorded revenue of $4.52 billion, a 17% increase when compared to $3.85 billion for the same period last year, while revenue for the third quarter grew 14% to $1.58 billion (2016: $1.38 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 18% year over year to a total of $3.53 billion relative to $2.99 million last year. According to KW, “We have experienced growth in domestic containerised cargo and domestic and transshipment moves of other cargo types including automotive, bulk and breakbulk cargo.”

The company’s ‘Logistics & Ancillary Services’ grew 13%, to total $1.05 billion, up from $928.27 million. The company outlined that, “During the quarter, the KWL Logistics and Ancillary Services Division expanded its client base. KWL continued its efforts to achieve superior performance in logistics through improved facilities, and the application of technology to improve service delivery and the overall customer experience for third party importers and exporters of cargo who also require secure and efficient handling or storage of this cargo in Kingston. KWL continues to maintain its market leadership in this business.”

Cost of sales rose 11% to a total of $2.36 billion (2016: $2.13 billion).  Nevertheless, gross profit grew by 26% for the period to total $2.16 billion relative to $1.72 billion recorded a year ago. Gross profit within the third quarter rose 13% to close at $743.17 million compared to $656.10 million booked for the quarter ended September 30, 2016.

Other operating income fell 66% year over year, to total $62.08 million (2016: $182.33 million). Administrative expenses increased by 6%, amounting to $786.96 million relative to $741.27 million for the same period last year.

As such, operating profit closed the period at $1.44 billion, 24% more than the prior year’s corresponding period of $1.16 billion. Operating profit for the quarter improved 28% to $520.89 million versus $408.04 million in 2016.

Finance Costs for the year declined 40%, to close at $91.59 million for the period relative to $153.06 million booked for the corresponding period last year.

Profit before taxation rose 33% to $1.35 billion for the period in contrast to the $1.01 billion in 2016.

Income tax expense for the period increased 16% to $153.86 million compared to $132.97 million for the corresponding period in 2016. Profit for the nine months moved from $878.45 million to $1.93 billion, a 36% growth year over year.

Net profits attributable to shareholders for the nine months rose by approximately 36% to total $1.18 million relative to $864.36 million in 2016. Third quarter profit attributable to shareholders improved 41% to close at $437.93 million. (2016: $309.80 million).

Total comprehensive income for the nine months amounted to $1.17 billion (2016: $707.83 million), while for the quarter a total of $427.55 million (2016: $234.99 million) was recorded.

Earnings per share for the nine months ended September 30, 2017 amounted to $0.82 (2016: $0.60), while for the quarter, the EPS was $0.31 (2016: $0.22). The trailing earnings per share EPS totaled $1.12. The total number of shares used in the calculations amounted to 1,430,199,578 units.

Management indicated, “Kingston Wharves Limited maintains a positive outlook for both its Terminal Operations Division and its Logistics and Ancillary Services Division. During the quarter, KWL distinguished itself on the basis of its service levels. The business takes seriously its role as a service provider to the full range of industrial, manufacturing, distributive and service sectors in Jamaica and across the region who depend on international trade. Our investment program on the terminal and within our specialized logistics centers is designed to directly facilitate these users and cuts across cargo types from containerised cargo, automotive cargo, industrial and project cargo, bulk and break bulk cargo. We now have an established track record for working closely with carriers as well as users of the cargo to tailor our land space, equipment, berths, warehousing, security systems and human resources to meet their needs.”


Balance Sheet Highlights:

As at September 30, 2017, the company’s assets totaled $25.07 billion relative to $22.93 billion a year ago, an increase of 9%, which was driven mainly by an increase in ‘Property, Plant and Equipment’ to total $19.11 billion from $17.86 billion. Retirement benefits and short-term investments assets also contributed to the growth in the asset base with a 51% and 16% increase to $936.18 million (2016: $619.08 million) and $3.25 billion (2016: $2.79 billion) respectively.

Shareholders’ Equity amounted to $19.47 billion compared to equity of $18 billion reported as at September 30, 2016.  The Company now has a book value per share of $13.61 (2016: $12.59).



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