Profits surge at Kingston Wharves

Revenues at Kingston Wharves jumped 19 percent or $467 million over the corresponding period in 2016 to $2.9 billion for the six months to June 2017 and 22 percent for the June quarter to $1.55 billion.
The strong revenue growth resulted in profit before taxation climbing 32 percent from $650 million in 2016 to $857 million for the half year and an even more impressive 40 percent in the quarter, to $454 million. Net profit attributable to shareholders increased 34 percent, moving by $187 million to $742 million over the comparable period in 2016 for the six months and a strong 46 percent in the latest quarter, to $414 million. The results produced earnings per stock unit of 29 cents for the quarter and 52 cents for the half year.
The strong quarterly performance comes against the background of a sharp fall in other operating income from $105 million to just $17 million, partially offset by finance costs declining to $31 million from $67 million in 2016 June quarter.
The Terminal Operations Division delivered revenues of $2.3 billion, a 19 percent increase over the corresponding period in 2016. Divisional operating profits increased by 50 percent from $485 million to $727 million. The key drivers include growth in container handling, motor units and break bulk operations amongst other areas. “Total revenues earned in the Logistics and Ancillary division amounted to $676 million, with operating profits totaling $192 million, an increase of 15 percent and 6 percent respectively, over the corresponding period in 2016 due primarily to 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 the warehousing operations and security services,” the chairman Jeffrey Hall, the company’s chairman reported to shareholders.
Administrative expenses rose much faster than revenues at 30 percent for the quarter, to $290 million and 18 percent for the six months to $543 million.
The Group’s balance sheet reflects short term investments and cash of $3.1 billion, shareholders’ equity of $19 billion and borrowed funds amounting to $2.4 billion.
The growth for the half year has been very strong suggesting that IC Insider.com’s forecast of $1.13 for the full year is on track and may even be exceeded if the second quarter pace of growth continues. The stock traded at on the Jamaica Stock Exchange on Friday gone at $30, resulting in one of the highest valued stock on the market at a PE of 27 times current year’s earnings. If the growth continues at the current pace into 2018 then the current value would be acceptable as the valuation would fall under 20 times 2018 earnings.
Kingston Wharves will shortly launch new logistics facilities for the warehousing of general cargo, and the storage of bulk and automotive cargo for domestic and transshipment markets and have already had acceptance from potential customers. The location of this is slated for lands adjacent to the Tinson Pen airport in Kingston.