CWT's profits surge 265.8% to $49.9m in Q2

Gross profit margins were stable across all segments except for logistics.

Logistics company CWT Limited's (CWT) profits surged 265.8% to $49.9m in Q2, from $13.7m in the same period last year.

According to OCBC Investment Research, CWT posted a revenue surge of 22.4% to $5.19b thanks to higher contributions from logistics services, commodity marketing, and engineering services.

Revenues from the logistics services increased 6.7% after its Commodity Logistics business improved. Commodity marketing revenues also increased 23.9% as a result of increased trading volume, and revenues from the engineering services surged 83.4% due to finalisation of a non-recurring design and build project.

OCBC Research lead analyst Eugene Chua said, “Gross profit margins were largely stable across all its business segments except for logistics, which saw a drop of 1.7ppt YoY to 14.1%, mainly due to weaker market conditions amid strong competition.”

"We expect the weak margin at logistics to persist as CWT incurs start-up costs in 2H17 for its new mega logistics hub," he added.

CWT is currently priced at $2.12 per share.