Excellent growth in revenues and profits for both of operating divisions

Kingston Wharves Limited (KWL) has delivered a sold third quarter performance, even with some challenges caused by the COVID-19 pandemic and issues surrounding the global supply chain disruption.

In spite of this, the financial results for the September quarter showed excellent growth in revenues and profits for both of operating divisions. The operations of KWL are highly cash generative and the balance sheet of the Group is strong.

The Group achieved consolidated revenues of $6 billion, which is a 20 per cent or $1 billion increase over the corresponding period in 2020. Net profit attributable to shareholders of $2 billion was up 28 per cent relative to the prior year.

The main Terminal Operations division generated operating revenue of $4.8 billion for the nine-month period ended September 30, 2021, representing a 19 per cent increase over the comparable period in 2020. This division covers the cargo handling services and port operations at our nine-deep water berths in the Kingston Harbour.

Divisional profits also increased by 16 per cent from $1.5 billion to $1.8 billion year-on-year.

Division remains the largest revenue generating segment of the Group

The division remains the largest revenue generating segment of the Group, contributing 70 per cent of revenues. These results represent a rebounding of the segment, driven by a marked increase in the transshipment of motor vehicles and growth in bulk cargo and break-bulk business related to the strong growth in domestic construction.

This positive performance comes in spite of the global shipping industry still experiencing significant disruptions caused by COVID-19 and other shocks such as the blockage of the Suez Canal earlier in the year. This has had a significant impact on the movement of containers through the global supply chain.

These challenges, together with the impact on business confidence by the COVID-19 related “no-movement” days and curfew arrangements in Jamaica, resulted in the company experiencing only a modest recovery of the containerised cargo segment of its operations.

Logistics Services

The Logistics Services division continued to experience steady growth in the third quarter. Logistics services include receiving, warehousing and delivery of a wide range of cargo types. This business unit generated revenues of $2 billion, an increase of 27 per cent over the prior year. Divisional profits increased by 41 per cent relative to 2020 from $543 million to $764 million.

This division has experienced consistent strong growth over the last five years, bolstered by strategic investment in warehousing, onboarding of trained logistics experts, and other business development initiatives.

In giving his outlook KWL Chairman Jeffrey Hall pointed to the strategic investment in terminal infrastructure, warehousing, human resources and digital technology capacity, which has positioned KWL to capitalise on shifts in the reconfiguration of the global supply chain.

“As a leading provider of terminal operations and logistics services to our region, Kingston Wharves is in a strong position to pursue the growth opportunities that may arise from current circumstances, “ Hall explained.

KWL benefitting from SEZ designation

He noted that a critical component of the KWL value proposition is its  Special Economic Zone (SEZ) designation, which affords clients the tax and trade benefits of the SEZ, along with expertise in customised, diverse cargo handling and inventory management.

He added that, “KWL’s auto-logistics hub and motor vehicle transshipment operations have benefitted from both the SEZ arrangements and the flexibility and efficiency of our cargo handling operations. We continue to be among the best in the region. KWL’s future growth requires it to focus on infrastructure readiness, as a critical strategic pillar. We are continuously enhancing our cargo management capability by engaging in major berth improvement and reconstruction, along with the acquisition of state-of-the-art port handling equipment”.

Kingston Wharves’ latest purchase, an eco-efficient mobile harbour crane, has arrived in the island and is being assembled. The company now owns seven cranes.