Business
JM | Dec 15, 2020

Cargo Handlers buys into local cement distributor

/ Our Today

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Company cites significant benefits in having distribution hub in Western Jamaica

Montego Bay-based stevedoring company Cargo Handlers Limited has purchased a 30 per cent stake in local cement distributor, Buying House Cement Limited (BHC).

BHC is also headquartered in the second city of Montego Bay, where it has been operating for the last 15 years, selling high quality Portland cement under the Anchor brand since 2006.

In disclosing the purchase of the 30 per cent share equity in the company, Cargo Handlers highlighted that it “recognises the significant environmental, road safety and other benefits associated with having cement distribution based on the western side of the island.

Company sees benefits accruing from this investment

In an advisory to the Jamaica Stock Exchange, where its shares are publicly traded, Cargo Handlers reports that, “as Jamaica emerges from the global pandemic, the company sees that it will be vital to have a consistent supply of competitively priced cement for the construction of affordable housing, schools, hospital, hotels, and road infrastructure in support of the Government’s aggressive growth agenda”.

Cargo Handlers, which is also involved in the business of equipment leasing and the provision of management services, said it is “very proud to have the opportunity to support our national effort and the future of a vibrant Jamaican economy”.

The company has pledged to offer exceptional products and service while playing a major role in Jamaica’s growth agenda. At its board meeting held on December 9, the directors of Cargo Handlers passed a resolution for the company to invest in BHC.

Cargo Handlers provides steady employment for warehouse, delivery partners and Bustamante Industrial Trade Union-represented port workers.

13% decline in year-end net profit

For the year ended September 30, 2020, Cargo Handlers net profit fell by 13 per cent to $113.33 million (2019: $130.86 million) following taxation of $17.22 million (2019: $21.38 million). Net profit for the fourth quarter decreased by 30 per cent to $19.79 million, relative to $28.46 million in 2019.

Revenue for the year was reduced by 23 per cent year over year to $283.46 million versus $366.45 million booked for 2019. Revenue for the quarter contracted 23 per cent to $54.31 million versus $70.59 million booked for the same quarter of 2019. In its fourth quarter report, the company stated that “the result this period, attributed to a 33 per cent decline in containerised cargo handled as domestic commercial activities, particularly within the hospitality sector, continues to be negatively influenced by the COVID-19 pandemic”.

Cost of sales for the year amounted to $5.74 million, in contrast to $8.20 million booked the prior year. As such, Cargo Handlers recorded gross profit of $277.72 million (2019: $358.24 million). As for the quarter, gross profit amounted to $54.31 million (2019: $70.59 million).

Admin expenses and finance cost both dipped

Administrative expenses recorded a 19 per cent decrease to $25.15 million (2019: $31.06 million), while other operating expenses reflected a decrease of 15 per cent to $146.58 million (2019: $171.83 million). The company stated that, “this is indicative of the reduction in manning throughout the period consistent with the less than optimal containerised loads presently being carried on the vessels”.

Cargo Handlers reported finance cost of $1.83 million for the period; this compares to the finance cost of $2.47 million for the same period in 2019. Interest income for the year amounted to $1.20 million (2019: $1.27 million).

Profit before taxation decreased to $130.55 million versus $152.24 million booked in 2019, while, for the quarter, pre-tax profits closed at $22.83 million (2019: $34.71 million).

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