Kingston Wharves Plans Further Expansion Work

  • Kingston Wharves Limited intends to do further expansion work at its facility located at the Port of Kingston. It plans to invest US$120Mn on the port developments over the next two to five years. This would be on top of the current US$60Mn that the company is spending on upgrades, including the redevelopment of Berth 7, which was completed last week. 
  • CEO of KWL Mark Williams says further expansion plans should optimise the use of space and will be done over the next five years. "The next phase of this terminal expansion will see us segmenting the terminal to be very well-organised and efficient."
  • He noted that the expansion will also allow for the accommodation of two to three large Panamax-sized vessels simultaneously. The Panamax size is the maximum size that can transit in the Panama Canal, these tankers range in length between 200 and 250 metres (650 and 820 feet) and have capacities of 50,000 to 80,000 dwt.
  • KWL’s stock price has increased by 22.9% since the start of the calendar year. The stock closed Tuesday’s trading session at $33.15 and currently trades at a P/E of 16.1x, which is below the Main Market Energy, Industrials and Materials Sector Average of 16.9x.
  • There are a few downside risks to consider, including the potential impact of higher inflation and geopolitical tensions affecting global supply chains. Additionally, the volume slowdown due to the restrictions in Panama may slow its growth momentum in the short-term.
  • Despite these risks, the outlook for Kingston Wharves is positive as it continues to strategically invest in both its physical and digital infrastructure. KWL is a regional leader in the industry and has the potential to reap greater and sustainable profit and long-term shareholder value through plans being executed.

(Sources: RJR & NCBCM Research)