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Port Authority profit up 76 per cent

Published:Friday | July 1, 2016 | 7:04 AM
Professor Gordon Shirley, president and CEO of Port Authority of Jamaica.

The Port Authority of Jamaica (PAJ) and its subsidiaries saw net profit increased by 76 per cent for the year ended March 2016, rising to $3.06 billion from $1.32 billion the previous year.

In the same period, the state-run agency made $20.18 billion in revenue, an eight per cent gain over the $18.68 billion realised at year end March 2015.

Essentially, profit grew at nine times the pace of revenue, some of it due to contained expenses. The agency also had lower debt financing costs in the period, down $95 million to just under $2.2 billion.

Container handling accounted for 60 per cent or $12.09 billion of turnover, while cruise operations brought in $2.81 billion or 14 per cent of the business done by the port authority.

Tugs and harbour fees accounted for $1.69 billion or nine per cent, and wharfage $1.17 billion or six per cent.

During the year, the Port Authority, led by Professor Gordon Shirley carved 0.6 per cent off expenses, which amount to $13.33 billion compared to $13.41 million the previous year.

Operating profit rose 30 per cent to $6.86 billion.

The main expense items were for salary and wages, $4.91 billion; fuel and utilities, $1.11 billion; security, $840 million; repairs and maintenance, $1.75 billion; depreciation, $1.16 billion, and insurance, $850 million.

Meanwhile, Port Authority shed more than $2 billion of debt in the past year, and reported an improvement in its leverage ratio, which is now 1.5 times equity, compared to 2.2 times a year ago.

The company still has $39 billion of liabilities weighing on its balance sheet, down from nearly $42 billion.

Foreign currency loans

The agency said approximately 87 per cent of its long-term loans are denominated in foreign currency and are converted to Jamaican dollars at the year-end exchange rate.

For the review period, unrealised exchange losses of $1.98 billion resulted from a six per cent depreciation of the Jamaican dollar against the United States currency during the review period. The Jamaican dollar depreciated from $115.04 at March 31, 2015 to $122.04 at end March 2016.

The asset base of the group was estimated at $58 billion, a yearly increase of $630 million or 1.09 per cent, while its capital base grew by a more robust 20 per cent to just under $18 billion.

The port developer and regulator said property, plant and equipment continue to be the most significant assets on its balance sheet, representing 44 per cent of the total, despite a reclassification of $4.67 billion as held for sale under current assets, resulting from the concession agreement for the Kingston Container Terminal.

The terminal will be taken over by Kingston Freeport, the vehicle being used by consortium partners CMA CGM and Terminal Link to operate the 30-year concession.

Port Authority closed the 2016 year with cash holding basically flat at $5.4 billion.

mcpherse.thompson@gleanerjm.com