Cargo Handlers port grows value to nearly $1b
THE NET worth of Cargo Handlers Limited, CHL, now hovers at just under $1 billion, arising from a twenty per cent growth in capital at year ending September despite a small slip in profits.
The wharf operator, which is nearly debt-free, also has a positive outlook on business for 2024.
With just $13 million in debt to service, nearly all its undistributed profits will continue to flow to its balance sheet as retained earnings and fortify its capital base. Cargo Handlers made $280 million in profit, its interim report shows, down two per cent year-onyear. Meanwhile, its capital climbed by $164 million, from $788 million to $952 million, the majority of which is in the form of retained earnings, or accumulated profit, amounting to $909 million.
The port company expects increased business activity next year arising from ongoing hotel developments and other real estate projects, which would augur well for sustained cement imports from Buying House, an associate company of CHL.
There is also cautious optimism that freight rates will decline further, which would spur shipments, and with it additional handling of ship calls.
“Activities within the hospitality and construction sectors continue to generate demand that drives both containerised and bulk cargo traffic across the port. We expect this trend to continue into the near future, as the island’s tourism sector is expected to maintain strong visitor arrivals in tandem with the execution of new-build hotel and residential projects,” said Chairman Mark Hart.
He added that the ongoing construction of the “sorely needed” Montego Bay perimeter road will ease transportation congestion when completed and also spur future developments.
“The outlook for international shipping remains mixed; the expectation from industry insiders is that the containershipping segment will shortly be grappling with excess vessel capacity on the major trade routes. The expectation is that this development will favour shippers as freight rates should trend downwards, which will help to reduce inflationary pressures,” stated Hart.
Profit before taxes rose to $353 million from $337 million a year earlier, but the higher-than-usual tax bill reduced earnings to $280 million.
The company’s turnover for the year rose to $515 million from $472 million, due to increased cement imports. Increased cement demand also produced a bigger share of profit from associate Buying House, improving to $88.6 million from $57.5 million.
Cargo Handlers continues to feel the effects of the suspension of containerised liquefied natural gas imports into Montego Bay, which happened earlier in the year, but “revenue generated from increases in dry bulk cargo throughput served to offset the absence of containerised LNG activity,” the company said in its financial report.