Kingston Wharves Records 4.5% Increase in Bottom-line YTD 

  • Despite solid revenue growth, higher administrative expenses tempered bottom-line growth for Kingston Wharves Limited( KW). KW reported net profit attributable to owners of $1.35Bn for its six months ended June 2024, representing a 5% (or $58.36Mn) increase relative to last year.
  • Over the six months, KW revenues increased by $684.96Mn or 15.5% to $5.11Bnaided by the performances in its two key operational areas- terminal (+4% or $129Mn) and logistic services (+36% or $523Mn).
  • Increased revenues from specialized logistics and warehousing operations, and port ancillary services fueled the growth. These areas benefited from capital investments and system improvements aimed at enhancing the functionality of its facilities and the competitiveness and efficiency of its services.
  • However, the company’s cost of sales has increased by 16.6% (or $407.80Mn) to $2.87Bn, which weighed on its gross profit margin, which declined from 44.3% in H1 2023 to 43.8% in H1 2024. Similarly, administrative expenses also grew by 8.5% (or $69.30Mn) to $885.98Mn due to higher depreciation charges and expenses associated with the commissioning of key strategic infrastructure projects. These projects are aimed at enhancing the terminal's capacity for increased throughput and ensuring long-term resilience.
  • Going forward, KWL plans to continue undertaking initiatives geared towards increased efficiency in its terminal operations, chiefly the demolition and removal of aged on-dock structures and the re-organisation of the terminal space. Management anticipates that this will complement its initiatives to improve customer experience, enhance training of its team, and increase utilization of digital technology.
  • KWL’s stock price has increased marginally by 0.9% since the start of the calendar year. The stock closed Wednesday’s trading session at $33.15 and currently trades at a P/E of 12.2x which is above the Main Market Energy, Industrials and Materials Sector Average of 8.7x.

(Sources: JSE and NCBCM Research