KINGSTON Wharves Limited (KWL) expects its December quarter to offer an uptick in domestic activity but show flat transshipment activity.

The outlook of the privately held wharf offers a glimpse into the wider economy.

“As we approach the end of 2014, KWL expects a marginal increase in domestic demand while transshipment is expected to remain flat. KWL’s management remains optimistic about future growth prospects and continues its strategic emphasis on expanding its customer base and offering a wider range of competitive regional and international logistics services,” according to KWL Chairman Jeffrey Hall in statements prefacing the company’s financials.

The company earned $176.8 million net profit on $969 million in revenue for its September quarter of 21 per cent more profit than a year earlier.

In October, KWL broke ground on its US$20 million “new total logistics facility”. The move forms part of a US$70-million phased upgrade aimed at doubling throughput at the wharf to one million 20-foot container units (TEUs), the company had announced earlier at its annual general meeting. The upgrade will allow the wharf, already one of the busiest on the island, to accommodate larger vessels traversing the expanded Panama Canal.

Net profit for the nine months ending September 30, 2014 increased by 12 per cent to $523 million due to a combination of factors led by cost containment.

“Key contributing factors to this performance include gains derived from management’s continued focus on cost-reduction measures, the establishment of new shipping line customer relationships, and tax benefits arising from our freezone status granted December 2013,” stated KWL in its financials.

These gains offset reduced terminal business from a major unnamed customer along with challenging economic conditions. The reduced terminal activity over nine months reflected a dip in total revenues at $2.7 billion or 11 per cent less year-on-year.

“The decline in revenue and operating profit for the nine months was influenced by the reduced business from a main shipping line customer and overall economic conditions that affected the volume of cargo imported and exported,” KWL said.

The upgrade will occur in three phases over a number of years. Phase one involves building a modern 24-hour logistics complex with modular warehouse space, the acquisition of gantry cranes, the closure of Third Street, the relocation of berth 7 warehouse to a newly refurbished facility, the relocation of transshipment and domestic car parks, and the demolition of on-dock warehouse and operational buildings.

The second phase is aimed at handling larger post-Panamax vessels including extending the berth by 50 feet, dredging along the berth to over 15 metres, along with the installation of new cranes.

Phase three includes expanding the port and motor vehicle transshipment operations to drive TEU throughput.

KWL’s current capacity stands at some 500,000 TEUs, management told the Jamaica Observer at its annual general meeting. It actually handled some 204,200 transshipment TEUs and 90,870 domestic TEUs, according to its 2013 annual report.

KWL’s largest shareholders include Jamaica Producers Limited (JP) at some 42 per cent and US-based listed company Seaboard at 21 per cent. In September, National Commercial Bank of Jamaica sold all its holding in KWL with $1 billion acquired by JP and $2 billion acquired by Seaboard.