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Kingston Wharves eyes more logistics services as profit dips 13%

Kingston Wharves Limited (KWL) reported net profit of J$1.9 billion for the nine‐month period ended September 30, 2020.

The results represent a 13 per cent, or $231 million, reduction over the prior year. Meanwhile, revenue for the period was $5.1 billion, an 11 per cent or $615 million drop compared to the corresponding 2019 period.
Net profit for the September quarter was $562 million, down from $657.2 million in 2019.

The third quarter’s revenue was $1.75 billion, down from $1.92 billion for the comparable period in 2019.

Star performer year to date, was KWL’s Logistics Services division which generated revenues of $1.5 billion, down one per cent the prior year, but delivered divisional profit which increased by nine per cent relative to 2019, moving from $499 million to $543 million.

Kingston Wharves chairman Jeffrey Hall

Company chairman, Jeffrey Hall, stated that KWL has been supporting  importers and exporters “who have had to rapidly adapt their sourcing and  shipping  arrangements as a result of the pandemic and have been able to  rely on our services to handle the movement of  goods  through  these  alternative maritime channels.”

He said that logistics services as been identified as a growth area, and  has accordingly directed capital investment and human resources to better  capitalise on these emerging opportunities.

The company’s terminal division which is responsible for the bulk of KWL’s sales generated operating  revenue of $4.0  billion for the nine‐ month  period, down eleven per cent over 2019.

Divisional profits stood at $1.5 billion, declining by 18 per cent year‐on‐year,  from  the  $1.8  billion achieved in 2019.

Jeffrey Hall said the Division remains a key profit centre  for the  company, despite the dip in revenues and profits  precipitated  by  the  global  falloff  in  shipping  volumes, due to the COVID‐19 pandemic.

“We are  pleased  that  the  third  quarter  performance  reflected some improvement when compared to  the results of the second quarter of 2020,” commented.

He stated that the  port’s “competitive multi‐purpose and multi‐user  facilities,  equipment  and  network  of  relationships  with  international  carriers  have  allowed us to remain central to the transport of  goods into and out of Jamaica and the Caribbean.”

Hall said that KWL has begun to see positive signs of a recovery in the two main operational segments  of its  business.
Third quarter performance has demonstrated growth over  the  previous  quarter,  which  was  noticeably  affected  by  the  trade  slowdown  precipitated  by  the  pandemic, he noted.

Noting that the company was engaged in pivoting to  maximise the returns from emerging opportunities, he said one such was near shoring.
Near shoring, Hall stated, “is expected to become a greater feature of the global supply chain as companies and economies seek to diversify their supply sources for increased efficiency and as a contingency against shocks to the global economy.

“KWL is well prepared to meet the expected demand for nearshore warehousing solutions, given our  superior infrastructure readiness, skilled workforce and digital connectivity.”He stated, “Setting our sights beyond the COVID‐19 pandemic, we remain in a cautious but determined expansion  mode.”

He stated the KWL intended to  add greater value by leveraging its Special Economic Zone (SEZ) status to deliver customised, tax efficient solutions to meet their supply chain and logistics needs.