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Kingston Wharves reports flat profit, reduced tax bill

Published:Tuesday | March 17, 2015 | 3:02 PM
Grantley Stephenson, CEO of Kingston Wharves Limited.

Kingston Wharves Limited returned relatively flat net profit for the financial year ending December 2014, which increase by just $2.4 million to $849.39 million from $846.97 million the previous year.

Profit before income tax declined by almost 20 per cent to $921 million, a $230.18 million reduction when compared with the 2013 financial year when it earned $1.15 billion.

However, income tax expenses fell to $71.72 million, a 76 per cent or $232.59-million decline over the $304.32 million it faced the previous year.

According to the audited financials, over the signature of Chairman Jeffrey Hall and Director Alvin Henry, the group recorded gross profit of $1.66 billion, which was down by 7.6 per cent from $1.8 billion the year before.

Direct costs were down 11.2 per cent, or $274 million, to $2.15 billion, from $2.42 billion, while operating profit declined by $331.77 million, or 22.4 per cent, to $1.14 billion from $1.47 billion.

Other operating income fell by $210.78 million, or just over 43 per cent, to $278.11 million from $488.9 million in 2013, while revenue declined by 9.75 per cent, or $412.71 million, from $4.23 billion to $3.81 billion.

As of December 31, 2014, trade receivables of $140.12 million (2013 - $172.85 million) for the group and $126.32 million (2013 - $126.32 million) for the company were past due but were not considered to be impaired. "These relate to a number of independent customers for whom there is no recent history of default," Kingston Wharves said.

Impaired receivables

However, as at the same date, trade receivables of $15.55 million (2013 - $14.54 million) and $8.14 million (2013 - $6.4 million) for the group and company, respectively, were past due by more than 60 days and considered to be impaired.

"These receivables were fully provided for," it said.

Kingston Wharves said it was granted free zone status under the Jamaica Export Free Zones Act, effective December 2013, resulting in income tax being charged on applicable profits at zero for export activities and 25 per cent for non-export activities.

This resulted in an effective tax rate of 8.5 per cent for the 2014 financial year. Its income tax expense amounted to $71.7 million, compared to $304 million in 2013.

Earnings per stock unit during the year was $0.59, the same as the previous year.

mcpherse.thompson@gleanerjm.com