Durrant Pate/Contributor

Jamaican transhipment and port operator, Kingston Wharves Limited (KWL), has seen its half-year profitability boosted by higher revenues from its terminal operations, which performed above par during the period.

For the six-month period ended June 30, 2022, KWL achieved consolidated revenues of J$4.6 billion, a 16 per cent or J$645 million increase over the comparable period in 2021. The Terminal Operations Division, which is the larger segment of the group, contributing 80 per cent of revenues, produced strong results for 2022 year-to-date (YTD).

The division generated operating revenue of J$3.7 billion for the six-month period, an increase of 20 per cent over the corresponding period of the prior year. Divisional operating profits increased by 22 per cent from J$989 million to J$1.2 billion.

The improved performance in this division was driven by the continued increase in the company’s container business. The strong YTD results demonstrate KWL’s competitiveness for shipping lines and cargo owners that seek to move cargo throughout the region.

Shareholders profit declined

Company chairman, Jeffrey Hall says “KWL will continue to invest in this business line to expand the capacity of our multi-purpose terminal and to drive long-term improvement in operating efficiency.”

In spite of the positive revenue out-turn, net profit attributable to shareholders of J$1.2 billion is down five per cent relative to the prior year.

KWL holds a strong cash position that is denominated primarily in US dollars and, as such, the appreciation of the Jamaican dollar, relative to the greenback, led to an exchange loss during the reporting period; whereas in the comparable 2021 period, the business booked an exchange gain. Net profit excluding foreign exchange gains or losses increased 23 per cent relative to the prior year.

The Logistics Services Division generated revenues of J$1.4 billion, an increase of 11 per cent over the prior year but its operating profits declined by three per cent relative to 2021 from J$439 million to J$427 million for the half year in review.

The operating performance was affected by inflationary increases in operating costs, together with the recognition of increased administrative expenses that were incurred to develop the business and its operating systems for the long term.

Benefitting from investments

Hall advises that, “KW Logistics is positioning itself to lead on receival, warehousing and delivery of cargo for the domestic and regional markets. We benefit from ongoing investment in personnel, modern purpose-built logistics facilities, scanning and security systems, and integrated information technology platforms for cargo tracking, inventory control, and handling.”

In his outlook, the KWL Chairman “remain convinced that Jamaica’s logistics capabilities will continue to be relevant and sought after in this environment, provided that we remain price competitive and maintain our service levels. Our emphasis on price competitiveness and service will require us to continue to invest in the development of our infrastructure while supporting, motivating and developing our team.”

Continuing he says, “this combination of initiatives can position our business to benefit from the adverse macroeconomic conditions by providing agility, and cost-effective cargo handling and storage solutions as a response to higher global logistics costs and tight labour markets in the United States.“

Preliminary works are currently underway on expanding KWL’s deep-water berths, clearing yard space and improving its functionality, and developing new warehousing and logistics facilities that will allow the company to capitalise on opportunities.

The group further noted that improvements to the berth, container yard, and cargo handling equipment and facilities, will be complemented by additional investments in digital infrastructure, such as the upgrading of Kingston Wharves Limited’s terminal operating system, expansion of e-commerce mechanisms and technologically-enabled security enhancements.

These developments, according to the port operator, will strengthen KWL’s prospects as a multi-purpose port terminal and bolster its role as a strategic gateway for domestic and transhipment cargo.