Fri | Sep 22, 2017

Kingston Wharves earnings surge on efficiency gains, lower debt cost

Published:Friday | March 4, 2016 | 3:00 AMCamilo Thame
In this June 25, 2015 file photo, directors of Kingston Wharves Limited are pictured at the company's annual general meeting. Seen from left are Chairman Jeffrey Hall, CEO Grantley Stephenson and Charles Johnston.

Kingston Wharves reported a 13 per cent increase in container moves and a 20 per cent increase in motor units handled at its berths last year, driven largely by growth in goods destined for Jamaica.

But that wasn't enough to return cargo volumes back to 2013 levels when 75,000 or 34 per cent more twenty-foot equivalent units (TEUS) were handled, and when 4,600 or eight per cent more vehicles passed through the port facility.

Indeed, the company's revenue grew by 22 per cent to $4.7 billion in 2015, but it was six per cent less than it was in 2013 in US dollar terms.

Yet, the cargo handler posted $1.27 billion in net profit, a 49 per cent improvement over 2014, when earnings was flat on the year before in Jamaican dollar terms.

In US dollar terms, the bottom line in 2015 was 42 per cent higher than the year before and 28 per cent higher than the year before that.

The company's port moder-nisation programme led to steady improvement in gross margins from below 43 per cent in 2013 to 46 per cent last year, while administration expenses remained flat in Jamaican dollar terms over the past three years, and declining by 14 per cent since 2013.

Reduced finance cost

Kingston Wharves also reduced its finance cost by 61 per cent to $163 million last year, as interest expenses declined due to a $400-million or 26 per cent decline in borrowings and as foreign exchange losses fell by over 60 per cent. The Jamaican dollar depreciated by 5.4 per cent in 2015 and by 11 per cent the year before.

The cargo handler ramped up capital expenditure by 27 per cent to $1.1 billion as it intensifies its programme to develop a total logistics facility, acquiring Liebherr Mobile Harbour crane - its fifth and largest to date - as well as two Taylor Reach Stackers.

The company said phase one of the construction included site preparation and driving of reinforced piles.

"Phase two of the construction of the 160,000-square-foot purpose-built warehouse and logistic facility is expected to commence early in 2016," said company Chairman Jeffrey Hall.

camilo.thame@gleanerjm.com