RA WILLIAMS Distributors Limited says disruptions affecting Middle East shipping have contributed to delays in pharmaceutical imports and doubled freight and insurance costs on some routes, posing a fresh risk to margins that narrowed sharply during its latest financial year.

The Spanish Town-based distributor told the Jamaica Observer that no shipments had been cancelled and goods continued to arrive. However, supplies of some high-volume products, including IV fluids, had tightened and delivery times had lengthened.

RA Williams stopped short of attributing the tighter supplies solely to the war, saying broader global tensions had worsened container shortages and other logistics problems.

The update comes after audited statements approved on July 20 warned that Middle East shipping disruption could delay pharmaceutical imports and cause temporary shortages.

“As of April 30, 2026, management identified the potential for delays in receiving inventory ordered from suppliers and the possibility of temporary shortages of products,” RA Williams said in the statements published Tuesday.

RA Williams said it does not track a fixed percentage of imports using the Strait of Hormuz, Red Sea or other affected corridors because freight carriers determine the routes used. However, disruption in those corridors has prompted carriers to use alternative routes, increasing transit times, freight charges and insurance premiums.

“In some specific lanes, we have seen freight and insurance costs double,” the company said.

RA Williams said it had absorbed the increases rather than pass them on to pharmacies and consumers. However, it is monitoring whether “measured price adjustments” may eventually become necessary.

The company is also using alternative sea routes and air freight for critical supplies, although it did not disclose the additional cost of those options.

Depending on the product and demand, RA Williams said it holds between six and 12 months of inventory cover, which should insulate its core product lines against short-to-medium-term delays.

The company entered the disruption with $705.8 million in inventory, equivalent to approximately 47 per cent of its assets. That provides some protection against delayed shipments but creates another risk because pharmaceuticals can expire or become obsolete if held for too long.

Its provision for obsolete inventory increased 82 per cent to $13.1 million during the year, while the auditors identified inventory as a key audit matter because of the limited shelf life of drugs and the risks associated with shipping, storing and regulating pharmaceutical products.

The higher freight and insurance costs come as RA Williams is generating more sales but retaining less from each dollar of revenue.

RA Williams’ revenue climbed 23.4 per cent to nearly $2 billion, but cost of sales increased even faster, rising 38.4 per cent and cutting the gross profit margin to 39.7 per cent from 46.2 per cent.

Operating profit declined 18.7 per cent to $87.5 million. After finance costs of $71.1 million, net profit fell 40.9 per cent to $16.9 million.

RA Williams did not attribute the profit decline to the conflict, which began during the final quarter of its financial year. The accounts instead identify continued shipping disruption as a threat to future product availability, margins and cash flow.

The company is also exposed to exchange-rate movements because much of its purchasing is denominated in US dollars. At April 30, it had net foreign-currency liabilities of approximately US$778,460.

RA Williams estimated that a one per cent depreciation of the Jamaican dollar against the US currency would reduce profit by approximately $1.23 million. That is equivalent to more than seven per cent of the profit earned during the year.

The cost of keeping cargo moving through the Red Sea is already rising. War-risk premiums for vessels using the Red Sea more than doubled on Monday, increasing from approximately 0.3 per cent of a ship’s value to 0.75 per cent and potentially adding hundreds of thousands of US dollars to a voyage, according to Reuters.

Reuters also reported that two tankers carrying Saudi crude to China and India reversed course in the Red Sea on Tuesday following Houthi threats against ships using Saudi ports. The reversals represented the first confirmed commercial response to the warning.

Further disruption to the Red Sea and other Middle East shipping corridors could extend the delays and add to the freight and insurance costs already being absorbed by RA Williams.

Management said it had stepped up communication and forecasting with suppliers, sought alternative routes and transport methods, diversified logistics providers and reviewed its procurement and working-capital plans.

RA Williams said those measures had helped it avoid any material financial impact to date. However, it still could not provide a forward-looking estimate because of the volatility surrounding global shipping.

The company did not disclose the value of the additional costs absorbed, the average length of shipment delays, the countries supplying the most exposed products, or the premium being paid for air freight.

Audley Reid, managing director of RA Williams Distributors Limited.