Kingston Wharves Group recorded $80.3 million net profit for the quarter ending March 2010 which was a reversal of the $134.9 million loss recorded in the prior year’s quarter due to declining finance costs.

The group’s finance costs were $30.9 million in the quarter versus $341.2 million in the prior year’s quarter, which augured well for the group’s flat revenues at $627.8 million compared with $624.7 million in the prior year’s quarter. At the same time, tonnage handled at berths one to nine declined to some 328,280 tonnes versus 336,530 a year prior–reflecting the decline in macroeconomics activity. The group has a relatively upbeat outlook despite the decline in activity. It will start a shipping line this year along with streamlining operations at warehouse five to increase efficiency.

“Management believes that the challenges faced by many in the domestic economy may adversely impact domestic cargo being imported for 2010. None the less we are optimistic that the initiatives that the group has implemented to reduce costs and increase revenue will positively impact our profitability in 2010,” stated the quarterly report endorsed by Grantley Stephenson chairman and chief executive officer posted to the Jamaica Stock Exchange. “Importantly we anticipate an increase in the volume of motor units transhipped through the hub that commenced operations in January 2010.”

During the March 2010 quarter its most important subsidary–terminal operations recorded a 4.1 per cent dip in revenues to $483.5 million whilst operating profit dipped 39 per cent to $141.5 million when compared with the similar period in 2009.

“Factors that negatively impacted operating profit…were the $73 million reduction in exchange gains on assets, increased costs of fuel and electricity coupled with the costs associated with the Jamaican Custom pre-inspection initiative,” stated the quarterly report.

During the quarter its subsidiary Harbour Cold Stores recorded a 16.5 per cent increase in revenues to $64.8 million and operating profit remained “materially unchanged” at $20.8 million compared with the prior year’s quarter. The operations were negatively affected by increased electricity costs and lower margins on additional business, the group stated. The subsidiary, Security Administrators Limited (SAL), recorded a 8.3 per cent rise in quarterly revenue to $90.6 million compared with $83.7 million for the corresponding period in 2009, which resulted in a 13.2 per cent rise in operating profit to $8.4 million for the quarter. The improvement in profitability was attributable to the increased number of requests for remotely operated vehicle inspection for vessels, stated Stephenson.

The previous financial year ending December 2009 was very tough for the group. Its revenues declined to $2.57 billion versus $2.77 billion a year prior, but the group was most affected by a 265 per cent jump in taxation to $188.3 million from $51.5 million a year prior. This resulted in $10.4 million in after-tax profit versus $165.9 million a year prior. Also, the annual tonnage handled declined to 1.3 million versus 1.8 million a year prior, reflecting decreased economic activity.