Earnings Down 6% at CWT

CWTLogoCWT Limited (SGX: C14), a leading solution provider of integrated logistics and supply chain management, reported record quarterly revenues of S$1.7b for the second quarter of 2013. It is a 66% increase over last year.

The surge in revenues was mainly due to contribution by a new product line of the Commodity Supply Chain Management (SCM) business, which was incepted in the third quarter of last year.

However, net profit fell 6% to $18.1m. The decline was due to “higher management cost and the restructuring cost incurred in 2Q2013 relating to Commodity SCM business which was partly off-set by tax savings and improved contribution from Joint Ventures.

The diluted earnings per share for the second quarter was 3.02 cents. In the previous year, it was 3.22 cents.

For the first half of the year, CWT chalked a 52% jump in revenues. It reported revenues of $3.2 billion compared to $2.1 billion last time. The net profit for the first six months of the year was down 1% to $45.1m.

The total borrowing of the company stood at $919 million, as of 30 June 2013. In the second quarter, the net cash used in operations was $212m compared to an inflow of $169 million last year.

Mr Loi Pok Yen, group chief executive officer, said: “CWT’s performance for 2Q2013 was weighed down by the management restructure of the Commodity SCM business during the quarter to enable us to better control and manage this business. We are prudent with the expansion of the Commodity SCM business amidst less than favourable market conditions.

He added: “We are also on track with our warehouse construction developments to create new warehousing capacity integral to our core logistics activities. Looking ahead, we will continue to better align our businesses, focus on profitability and effectively invest in growth capacity and capability.

No dividends were declared for this quarter. The shares closed at $1.425 on 7 August 2013.

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