Two major components of the US$60 million capital development investments being undertaken by Kingston Wharves Limited have made major strides. The Berth 7 Redevelopment project and the first phase of the Integrated Modular Warehouse Complex at Ashenheim Road are set to be completed by the end of 2023.
CEO Mark Williams, speaking at the company’s Annual General Meeting at the AC Hotel in Kingston yesterday (June 15) said that the company was undertaking a comprehensive slate of initiatives geared at “berthing” success.
“We have some broad themes on which we will focus over the next 18-36 months. These include creating a performance-driven culture, being customer-centred and emphasising infrastructure readiness. We will also continue to focus on digital transformation and pursuing sustainable growth and profitability,” the CEO stated.
As it relates to infrastructure readiness, Mr. Williams reported that the Berth 7 Redevelopment project will involve the refurbishing of the 182.5 metre berth, extending seaward by 15.24 metres to be in line with the previously developed berths 8 and 9 and Capital dredging carried out to the depth of 13.7 metres. He underscored that the initiative was aimed at boosting the company’s berthing capacity, specifically to host multiple panamax size vessels simultaneously.
To support berthing capacity improvements, Kingston Wharves is also undertaking a major reconfiguration of its terminal. All buildings and support functions will be relocated from the terminal, and the company will carry out greater segmentation; Berths 1-5 will serve KWL’s pure car and truck carriers and other bulk and break bulk business while Berths 6-9 will be reserved for containers, Mr. Williams said.
“Optimized berthing and yard organisation will increase our annual throughput capacity to more than 1 million TEUs fostering greater efficiencies for transhipment and domestic services while strengthening safety and security operations,” the CEO explained.
Kingston Wharves is also well advanced in its preparation for nearshoring, with the construction of its 300,000 sq. ft. near port modern integrated warehouse complex at Ashenheim Road in Kingston. The first phase of the project will deliver 70,000 sq. ft. of dry warehouse space and nearly 60,000 sq. ft. of cold storage. Expected to be completed by Q4 of 2023, the Logistics complex is being constructed at a cost of US$25 Million.
“One of the things that COVID taught us is that nearshoring is a real opportunity for countries like Jamaica, and we are putting money down and putting stakes in the ground so we can realise those opportunities,” the CEO stated, adding that most of the cold storage space had already been committed to prospective renters.
“After investing US$60 million in our business, we want to grow the bottomline. Our terminal is well structured and there are great opportunities to grow our logistics business. We want to go multi-modal. As a company we want to get into every area of logistics and into every area of transportation,” Mr. Williams said.
The CEO said that KWL continued to provide multi-purpose cargo handling and provided shipping connections to some 45 destinations. Commenting on the company’s logistics business, Mr. Williams disclosed that Kingston Wharves had been the most called port for Höegh Autoliners for three years running. He added that as it related to auto-transhipment, Kingston Wharves provided global connections on every continent.
With respect to digital technology, the CEO reminded stakeholders of KWL’s strides in digital technology with the copping of an international award in 2021. Disclosing that KWL was in the process of upgrading its terminal operating system, Mr. Williams stated: “When you are moving cargo through a terminal at the rate that we are, you need a robust IT system,” the CEO stated.
He further noted that KWL was building a performance-driven culture began with its people, noting focus on engaging and retaining the right people, as well as training and certification. “When we get our people right, we will be better deliver service excellence to our customers,” Mr. Williams noted.
Kingston Wharves achieved revenues of $9.5 billion in 2022, a 9% increase over the previous year, and operating profit of $3.3 billion, a 16% decline over the previous year. The CEO cited inflation and foreign exchange movement for the decline. Giving broader perspective on KWL’s performance, the CEO noted that revenue had increased by 31% over the last five years and operating profit up 33%.
The KWL Terminal Services earned $6.7 billion in revenue and $2.8 billion in operating profits while the Logistics Services Division generated revenues of $2.4 billion and operating profits of $830 million.
Shareholder equity increased by 2%; dividends declared increased by 12% while earnings per share decreased by 16%. Mr. Williams noted that shareholders’ equity increased 45 %, dividends declared increased by 49% and earnings per share increased by 39 % over the last five years.
For the first quarter of 2023, Kingston Wharves experienced revenue growth of 2% and profit before tax of 5%.
Expressing cautious optimistic heading into the rest of the year, the CEO cited headwinds such as global inflation, foreign exchange volatility, high interest rates, and cyber security and potential supply chain and logistics issues.
“Notwithstanding the headwinds, the ship of Kingston Wharves is steady. You would have seen the balance sheet, $42 billion in assets. We have a very strong cash position and we are using that cash to prepare for the future. We (also) have a very competent management team and equally important, we have an experienced Board of Directors. With that, you can be assured that your company is in good hands,” the CEO told shareholders.