KWL pumps half-billion into property joint venture

PORT COMPANY Kingston Wharves Limited, KWL, has pumped a total of more than half-billion dollars into SSL REIT, the property investment vehicle of Stocks and Securities Limited, for an undisclosed stake in the company.

The port company made an investment of $61.6 million and “issue of short term loan” of $470 million under a joint-venture agreement in which it acquired a 50 per cent stake in SSL REIT. The property company is primarily in the business of rental of warehousing facilities. The acquisition is classified in KWL’s third-quarter earnings report as an investment in associate.

Up to press time, officials of KWL were not immediately available to respond to a Financial Gleaner query about the structure and terms of the deal, and what board- or management-level representation KWL would have at SSL REIT.

KWL is also in the business of commercial space rental, from which it appears to have earned $282 million to September. Its category ‘other operating income’ saw a significant jump on the $62 million earned for the same period last year.

Its core port operations generated revenue of close to $4 billion, a 13 per cent increase over the corresponding period last year. This division’s profits increased by 22 per cent from $1 billion to approximately $1.3 million year-on-year. The busiest period for the terminal is the current fourth quarter to year end.

In an interview with the Financial Gleaner earlier this month, KWL’s Chief Executive Officer Grantley Stephenson was upbeat about the company’s financial performance and operations.

After planning, investing and waiting for the past 10 years, Kingston Wharves just about has in hand the approval to operate as a special economic zone, or SEZ, giving it the green light to export directly from its transshipment and logistics hub at Newport West in Kingston.

KWL executives expect the development to put wings to its nascent logistics operations that is already buffing the company’s bottom line, adding some $1.3 billion to its $5.3-billion ninemonth revenues to September this year, and shoring up ninemonth net profits to more than $1.4 billion. KWL’s numbers were also helped by a $200.5-million foreign exchange gain, its financials released this week revealed.

Stephenson is projecting that with the SEZ approval having been recently gazetted, the terminal operator, which ventured into logistics in 2010, will be reaping even bigger contributions to revenues and profits from the logistics segment.