City boom to boost Cargo Handlers in 2024
Published:Wednesday | January 31, 2024 | 12:09 AMSteven Jackson/Senior Business Reporter
Cargo Handlers Ltd (CHL) anticipates growth in 2024 arising from roadworks and the hotel boom in Montego Bay, St James.
The revenue and profit at CHL, which operates a major wharf in the city, already hit record levels for its September 2023 year end. It now expects increased activity from the importation of inputs to support the boom.
“We expect growth because of the projects like Pinnacle, Hard Rock, the Montego Bay perimeter road and so on,” said Mark Hart, executive chairman in response to Wednesday Business queries.
For instance, the Hard Rock Casino is slated to cost US$800 million; and the Pinnacle residential towers are set to cost US$350 million, after building four towers that span 28 floors each. The projects are at various stages of planning and preconstruction but the flows should start in the medium term.
Hart also mentioned spending on the Princess Hotel in Green Island, Hanover, the refurbished Cornwall Regional Hospital, and the expansion of the Sangster International Airport which will support increased tourism arrivals.
Hart, however, declined to reveal any expectant rise in sales for 2024.
“We prefer not to,” he said.
The company, however, expects higher wharf activity while expecting cement sales at its subsidiary to remain capped due to a government quota on such imports. Over time, however, he expects the cap to increase.
“When we look at all of these significant projects, we are certain that Cargo Handlers will benefit from the demand for our goods and services that is naturally occurring to support all this expansion, our traditional cargo-handling logistics business and our affiliated company Buying House Ltd. Cement importation will certainly benefit in the years ahead,” stated Hart in his chairman’s statement in the annual report.
Hart indicated that the Jamaican economy now seems poised to benefit from increased investor confidence.
CHALLENGES
While the cargo logistics sector is primed for growth, the cruise industry faces challenges. External factors, such as the Cayman Islands’ reluctance to build docking facilities for larger cruise ships could divert cruises from the centrally positioned Greater Antilles towards the southerly Lesser Antilles.
Also, industry-wide concerns about environmental impacts and rising fuel costs pose challenges for cruise companies. Nevertheless, Hart remains optimistic about the wider future of cruise tourism in Jamaica.
“In our favour, Jamaica is unique, and the demand for cruise customers that want to visit our natural beauty is strong and we will leverage this to mitigate some of the headwinds facing the industry,” stated Hart.
Cargo Handlers is worth $1 billion in capital up to September 2023, up from $789 million a year earlier. It virtually doubled its capital from $464 million in 2019, which was the final year before the pandemic reset many businesses around the globe.
The company has also doubled its profit since the pandemic to $322 million in 2023, from $289 million in 2022, and $130.9 million in 2019.
Its debt level remains low at $135 million or roughly one-tenth of its $1.13 billion in total assets.