KWL to navigate uncertain trade prospects in final quarter
Port company Kingston Wharves Limited (KWL) reported a near four per cent dip in earnings for the September quarter.
KWL reported quarterly net profit of $315 million, down from $327 million in the year-prior period. Revenue ticked up to $1.38 billion from $1.19 billion.
The port operator's earnings were up 15.7 per cent over the nine-month period. Profit rose to $878.45 million on improved revenues of $3.85 billion. Earnings per share rose from 52 cents to 60 cents.
For the fourth quarter, however, KWL expects developments in global trade to weigh on port operations.
KWL Chairman Jeffrey Hall says recent global events have led to "uncertainty about the prospects" for international trade and may present challenges for several already-struggling global shipping lines. He said the expected slowdown of global trade - based on World Trade Organization estimates for the remainder of 2016 - clouds the outlook for the shipping sector. In the September quarter, large shipping line Hanjin filed for bankruptcy.
"As we move into the final and most active quarter of 2016, we will address these challenges with a series of initiatives that will improve the overall experience of importers and exporters who use our services, develop and deepen long-term relationships with those shipping lines that can best take advantage of our unique location and range of services," Hall said in a statement prefacing KWL's earnings report.
On Thursday, the Inter-American Development Bank affirmed the downward trajectory for outbound trade across Latin America saying exports for the first seven months of 2016 fell 8.5 per cent, after falling 14.8 per cent for all of 2015 - data contained within its newly released Trade and Integration Monitor 2016 report.
"The intensity and the duration of the export decline indicate that global trade has entered a new normal characterised by low growth. This, in turn, will require a change of gear in the policies that support the international insertion of Latin American and Caribbean countries," Paolo Giordano, principal economist of the IDB Integration and Trade Sector and the report's coordinator, in a statement announcing the release of the trade publication.
Subsequent to the end of the September third quarter, KWL completed the commissioning of "the largest mobile harbour crane anywhere in the Caribbean". This new crane expands the KWL fleet and allows it to handle a greater volume and range of containerised and break bulk cargo. It also allows KWL to handle the loading and discharge of larger ships.
The year-to-date operating revenue of the KWL Terminal Operations Division amounted to $2.98 billion, a 15 per cent increase year-on-year. Divisional profits increased by seven per cent from $712 million to $766 million.
The Logistics and Ancillary Services Division generated revenues of $928 million, or 16 per cent more over the relative period year-on-year. The division is a full-service logistics provider in Jamaica, with services ranging from warehousing and cold storage, to cargo and port security operations.
"The Logistics and Ancillary Services Division continues to make significant strides as KWL builds out its logistics services initiative and cements itself as a leading player in the industry," said Hall.