CWT’s earnings drop 17% to $25.1m in Q1

Withholding taxes took a toll on earnings.

CWT Limited’s (CWT) profit after tax fell 17% to $25.1m in Q1, on back of withholding taxes paid for foreign dividends received during the quarter

According to the company’s news release, stripping out the withholding taxes, profit for the quarter would have been $29.3m and marginally lower than 1Q15’s $30m.

Meanwhile, a report by OCBC asserts that commodity marketing will continue to be impacted by the volatility of commodity prices and do not rule out more unrealised mark-to-market losses ahead. On the flip side, CWT’s logistics segment—a heavyweight contributor—to help offset and stabilise the earnings outlook.

Further, the GPM improvement in logistics business recorded in Q1 is likely to sustain, with occupancy expected to improve at Pandan Logistics Hub by more than 90% by 4Q16.

Over the longer-term, with the mega logistics hub still poised for completion by 2H17, meaningful contribution from FY18 onwards will likely be a key growth driver.

OCBC asserts that one key catalyst for CWT is still the possibility of a potential privatisation occurring in the near-term. With CWT’s major shareholder C&P Holdings still undergoing business strategic review, a general offer could potentially be triggered if C&P sells its 32% stake in CWT.