Volume of cargo handled during the year was reduced as a result of the COVID-19 pandemic

Kingston Wharves Limited (KWL) ended 2020 with declines in both revenue and profit, due mainly to the fall off in the cargo business as a result of the contraction in the general economy caused by COVID-19.

Total revenue for the year was down 10 per cent to $7.14 billion, relative to the $7.90 billion recorded in 2019. Revenue for the last quarter amounted to $2.03 billion, a seven per cent contraction relative to the $2.18 billion recorded for the same period in 2019.

The ‘Terminal Operations’ which accounted for 69 per cent of total revenues, fell 14 per cent year over year to a total of $4.96 billion relative to $5.75 billion last year. According to Kingston Wharves, “the volume of cargo handled during the year was reduced as a result of the COVID-19 pandemic”.

Kingston Wharves handles a wide range of cargo types serving the domestic and transshipment markets. The company’s ‘Logistics & Ancillary Services’ grew two per cent in 2020 to total $2.18 billion, up from $2.14 billion booked 12 months earlier.

The company highlighted that, “the Logistics Services Division has emerged as a resilient profit centre within Kingston Wharves Limited while offering agile logistics solutions and providing useful alternatives to both commercial and personal effects clients. The division’s modern warehousing, digital and systems capabilities also allowed KWL to maintain solid service levels notwithstanding the stringent health and safety requirements associated with the pandemic”.

Profits down year-over year

Gross profit fell by 17 per cent for the period to total $3.34 billion relative to $4.04 billion recorded a year ago. Gross profit within the fourth quarter also fell 17 per cent to close at $919.20 million compared to $1.11 billion booked for the quarter ended December 31, 2019.

Other operating income for the period rose year over year to total $580.50 million (2019: $262.02 million). Administrative expenses for the year contracted by 11 per cent, amounting to $1.07 billion from the $1.20 billion recorded for the same period last year.

As such operating profit closed the year end at $2.85 billion, an eight per cent decrease relative to the $3.10 billion recorded for the comparable period in 2019. For the fourth quarter, operating profit amounted to $819.49 million, up from the $787.41 million posted in 2019.

Profit before taxation closed the year at $2.70 billion, a nine per cent decline year over year (2019: $2.96 billion). In addition, net profit attributable to shareholders declined by 14 per cent to total $2.24 billion relative to $2.60 billion recorded for the corresponding period in 2019.

Net profits attributable to shareholders for the quarter amounted to $643.43 million, a 17 per cent decline relative to the $772.42 million recorded for the same quarter of 2019. Consequently, net profit for the period moved from $2.64 billion in 2019 to $2.28 billion in 2020, a 14 per cent decline year over year.

No gains made on acquisition of subsidiary

No gain on acquisition of subsidiary and gain on disposal of interest in joint venture were booked for the period under review relative to the prior year where gains on acquisition of subsidiary amounted to $16.12 million and $22.16 million gain on the disposal of interest in joint venture . Finance cost closed the period at $154.88 million, down from the $177.92 million booked in 2019.

Income tax expense for the period amounted to $421.99 million for the year end, a 29 per cent increase relative to the $326.14 million incurred for same period last year. Total comprehensive income for the year end closed at $6.80 billion, more than doubling the $2.64 billion posted in 2019.

Consequently, earnings per share for the year ended December 31, 2020 amounted to $1.56 (2019: $1.82), while earnings per share for the quarter amounted $0.45 relative to the $0.54 recorded for same quarter in 2019.

The management stated that the company will be enhancing its investment in robust security technology, policies and system s in 2021. “In this period of relative economic uncertainty, we will prioritize our investment in security as a way of reducing the range of risk factors facing our clients,” the management reported to shareholders.

As at December 31, 2020, Kingston Wharves had assets of $38.23 billion relative to $32.58 billion a year ago, an increase of 17 per cent, which was driven mainly by an increase in ‘Property, plant and equipment’ and ‘Short term investments’ which increased 22 per cent and 25 per cent respectively to total $27.24 billion (2019: $22.29 billion) and $6.56 billion (2019: $5.23 billion) respectively.