Kingston Wharves Profits Down as Expansion Plans Continue 

  • For Q3 20241, Kingston Wharves Ltd. (KW) saw its earnings slashed by 21.7% year-over-year to close at J$760.9Mn as revenue growth (+4.2%) was outpaced by the increase in its cost of sales (+23.9%). This weaker Q3 performance weighed on the company’s earnings for the nine months ending September 30, 2024 (9M 2024) which dipped 4.3% to J$2.18Bn (EPS: $1.46).
  • Due to slower growth in Q3, revenues for the 9M 2024 period totalled J$7.84Bn, reflecting an 11.3% year-over-year increase. Amid the slow revenue growth, the Logistics Services Division was the standout revenue performer. Booming demand for specialised logistics and warehousing drove logistics revenues up by 20.0% to J$2.90Bn and operating profits by 30.0% to J$1.10Bn during the 9M period.
  • Conversely, operating profits from Terminal Operations slipped 14.0% to J$1.40Bn, despite a 7.0% revenue growth2. The profit slip reflected higher depreciation and major infrastructure spending on upgrades to boost throughput capacity.
  • Owing to slowed operating profit from Terminal Operations, KW’s 9M 2024 consolidated operating profit, was 2.35% lower than for 9M 2023, closing at J$954.50Mn. Higher finance costs for the quarter also dented 9M profits, doubling to $153.61Mn.
  • Notwithstanding the profit dip, KW continues to invest in infrastructure, including a recent J$30.0Mn renovation of Berth 7, enhancing its capacity to handle larger vessels and boosting transhipment capabilities. Moreover, future upgrades are planned to improve terminal efficiency and customer experience.  
  • Ultimately, KW’s infrastructure spending aims to maintain its market leadership in cargo receival, handling, warehousing, and delivery for domestic and regional markets.
  • KW’s stock price has appreciated by 12.6% year-to-date. As of the end of Wednesday’s trading session, the company’s stock price closed at J$30.40, with a corresponding P/E ratio of 14.40x which is lower than the 23.07x average for the Main Market EIM3 Sector.

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1July 1 - September 30, 2024

2Terminal operations represent over 60.0% of KW’s revenues.

3Energy, Industrials, and Materials.

(Source: NCBCM Research & KW Financial Statements)