By Durrant Pate/Contributor

Port and logistics company Kingston Wharves Limited (KWL) delivered a solid first-quarter (Q1) performance with the Terminal Operations Division, the larger segment, contributing over 60 per cent of revenues.

KWL achieved consolidated revenues of $2.6 billion, a 12 per cent increase over the corresponding period in 2023. Net profit attributable to shareholders of $716 million increased by 5 per cent or $32 million over 2023.

Earnings per share for the quarter was 50.08 cents compared to 47.81 cents last year. The Terminal Operations Division generated revenues of $1.8 billion for the quarter under review but revenues were flat compared to 2023.

Contraction in operating profits

Divisional operating profits dipped by 12 per cent, moving from $574 million in Q1 2023 to $505 million in 2024. The reduction in operating profits is primarily attributable to an increase in depreciation charges and expenses in connection with the commissioning of infrastructure projects that will give the terminal the capacity for increased throughput and ensure its resilience over the long term.

These costs also reflect the impact of inflation on asset values and operating costs. With global trading volumes being generally affected by increased economic uncertainty and higher interest rates, KWL elected to delay passing on the full effect of the increased costs to customers.

Logistics services

The Logistics Services Division generated revenues of $990 million in Q1 2024, an increase of 33 per cent or $248 million over 2023. Operating profits for the division rose by 66 per cent compared to 2023, reaching $375 million.

This growth was driven by increased revenues from specialised logistics, and warehousing operations involving full-container-load cargo, motor vehicle handling services and port ancillary services, which benefited from the capital investments and system improvements made to enhance the functionality of our facilities and the competitiveness and efficiency of our services.

KWL continues to improve its service offering to maintain its market leadership on the receival, handling, warehousing and delivery of logistics cargo for both domestic and regional markets.

Outlook

In giving his outlook to shareholders in the company’s March 2024 quarter report, KWL Chairman Jeffrey Hall notes that, “During the quarter, KWL experienced  the impact of drought conditions on  the volume of  trade passing  through  the  Panama  Canal  on  trade  routes  from  Asia  to  the  wider  Caribbean  region. The  impact  of relatively high interest rates on the construction sector, and some underlying uncertainty in the tourism market also affected cargo movements to Jamaica.”

Despite these challenges, Hall credits KWL for delivering satisfactory  results while noting that Berth 7, one of the company’s nine deep‐water berths has been completely renovated as a modern facility  with  improved draft and successfully re-integrated  into our operations. This US$30-million infrastructure  improvement allows us to  simultaneously handle  a  multiplicity  of  larger  vessels.

The development improves KWL’s trans-shipment capabilities and sets the stage for future developments in the organisation and utilisation of our yard space and gate operations, that will in turn increase our capacity and enhance its efficiency.

Together with KWL’s expertise and strategic location in the Caribbean, these investments will position the company  to maintain a unique competitive edge as a Caribbean gateway terminal.