Electricity cost impacts Kingston Wharves’ profit

The Kingston Wharves Group has blamed the weak state of the economy as well as the high cost of electricity for a 47.3 per cent downturn in after tax profit, a moderate increase in revenue and flat performance in some areas during the year ending December 2011.



Operating profit decreased from $921.72 million in 2010 to $670.76 million, a decline of $280.96 million or 30.48 per cent, according to the latest financials released to the Jamaica Stock Exchange.



Profit before taxation was $467.30 million, compared to $887.28 million the previous year, a decrease of $419.98 million or 47.33 per cent, chairman and chief executive officer, Grantley Stephenson reported.



The group recorded increased revenue of $142.92 million or a marginal 4.72 per cent upward movement for 2011, moving to $3.16 billion from $3.02 billion.



However, revenue declined in the quarter ended December 31, 2011, from $871.23 million to $827.19 million, a decrease of $44.04 million or 5.05 per cent.



Profit before tax for the quarter was $125.21 million, compared with $301.54 million for the same period in 2010.



According to Stephenson, “the result of the group for the 12 months was negatively impacted by declining cargo volumes as a result of the weak state of the Jamaican economy, coupled with rising utility and maintenance costs.”



However, he also advised shareholders that Kingston Wharves Limited (KWL) conducted an energy audit last year, the recommendations of which, when fully implemented, should assist the company to reduce the cost of electricity.



KWL’s revenue for the year was $2.5 billion, an increase of $62.39 million or 2.56 per cent over the $2.44 billion recorded for the corresponding period in 2010.



Operating profit decreased by 29.86 per cent of $258.35 million to $606.77 million, compared with the $865.12 million recorded the previous year.



Revenue for the quarter ended December 2011 declined by $63.41 million or 8.81 per cent from $719.76 million to $656.35 million. Operating profit for the quarter decreased by $141.11 million or 45.53 per cent to $168.78 million from $309.89 million.



mcpherse@gleanerjm.com