Business
JM | Nov 23, 2022

Kingston Wharves outlook positive despite persistent challenges

/ Our Today

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Improving profitability and business operations

(Photo: Kingston Wharves)

Durrant Pate/Contributor

Jamaican port operator, Kingston Wharves Limited (KWL) is maintaining a positive outlook on the business, despite persistent challenges in the macroeconomic environment.

In spite of the negative effects of high energy cost, high inflation, foreign exchange volatility and tightening monetary policy in several economies, KWL has been strengthening the business by capital development works now under way at its terminal facilities, warehousing and motor vehicle management infrastructure.

Company Chairman Jeffrey Hall advised that KWL is well placed to capitalise on the increased business confidence in Jamaica and the growing international demand for shipping and logistics services from manufacturers and distributors, who are diversifying their supply chains in response to the global shocks of the last three years.

Jeffrey Hall, chairman of Kingston Wharves.

He pointed out that KWL is leveraging its expertise to meet the demand of the marketplace noting that its services as a global motor vehicle transshipment hub and a regional hub for containerised cargo remain in high demand.

Investment in digital solutions

Enhanced investment in digital solutions and human resource are also part of Kingston Wharves’ strategic push to build capacity and boost competitiveness. KWL’s diversified service offering and cargo types continue to be a major strength of our business.

This has resulted in a commendable year-to-date performance in which the business achieved consolidated revenues of J$7 billion for the nine-month period ended September 30, 2022, representing a 14 per cent or J$869 million increase over the corresponding period in 2021.

For the nine-month period ended September 30, 2022, KWL achieved consolidated revenues of J$7 billion, a 14 per cent or J$869 million increase over the corresponding period in 2021. Net profit attributable to shareholders amounted to J$2 billion, a marginal of 0.6 per cent relative to the prior year.

(Photo: Kingston Wharves)

For the September quarter KWL achieved consolidated revenues of J$2.45 billion, a 10 per cent or J$223 million increase over the corresponding period in 2021. Net profit attributable to shareholders for the quarter closed at J$820 million, which is seven per cent relative to the prior year.

Earnings per share for the quarter was 57.36 cents compared to 53.48 cents in prior year.

Segment performance

The Terminal Operations Division generated operating revenue of J$5.6 billion for the combined three quarters, an increase of 16 per cent over the corresponding period of the prior year. Divisional operating profits increased by 19 per cent from J$1.6 billion to J$1.9 billion.

The Division is the larger segment of the Group, contributing 70 per cent of revenues. The improved performance in this division was driven by the continued increase in KWL’s transshipment container and motor unit business.

(Photo: Kingston Wharves)

The strong year-to-date results demonstrate KWL’s competitiveness for shipping lines and cargo owners that seek to move cargo throughout the region. KWL will continue to invest in this business line to expand the capacity of its multipurpose terminal and to drive long-term improvement in operating efficiency.

Logistics services

The KWL Logistics Services Division generated revenues of J$2.1 billion, an increase of 10 per cent over the prior year. Divisional operating profits dropped 22 per cent this year from J$734 million to J$572 million.

The reduction in divisional operating profits was impacted by a loss of J$85 million incurred from the demolition of a building for the purpose of increasing storage capacity and operating efficiencies.

The operating performance was affected by inflationary increases in operating costs, together with a reallocation of administrative expenses which was previously accounted for in the terminal segment.

KW Logistics has positioned itself to lead on receival, warehousing and delivery of cargo for the domestic and regional markets. In addition, KWL benefitted from ongoing investment in personnel, modern purpose built logistics facilities, and integrated information technology platforms for cargo tracking, inventory control and handling.

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