Improved efficiency cuts KPA earnings

Some of the imported containers at Mombasa port.[Omondi Onyango,Standard]

Revamped operations at the Port of Mombasa appear to have come at a cost, with Kenya Ports Authority (KPA) reporting a major drop in profit on account of reduced revenue from storage of containers.

KPA reported a 62 per cent drop in profit after tax for the year to June 2020.

According to the authority’s annual report, net profit stood at Sh3.71 billion over the period compared to Sh9.75 billion in the year to June 2019.

KPA has in the recent past put in place measures that have reduced congestion at the port, which has had the impact of significantly reducing the amount of time that containers are held awaiting clearance.

“The profits are lower mainly due to the decline in storage and remarshalling charges as a result of improved efficiency in cargo evacuation from the port,” said KPA in the annual report.

It also said its revenues declined 9.5 per cent to Sh50.16 billion over the year to June 2020 compared to Sh55.45 billion in the period to June 2019.

This was attributed to recent operational changes, which include KPA and Kenya Railways streamlining Standard Gauge Railway (SGR) operations at Port Reitz yard. The authority has also centralised cargo handling processes.

There was also the introduction of double-deck wagons on SGR, which significantly contributed to increased deliveries to the Inland Container Depot (ICD) in Nairobi.

Despite the decline in the earnings, Mombasa port reported an increase in the volume of cargo handled by three per cent to 33.63 million tonnes during the year compared to 32.65 million tonnes in 2019.

In the annual report, KPA said it paid the National Treasury a hefty dividend after the government directed all State corporations to surrender idle cash they were holding in their bank accounts in late 2019.

The authority was last year among the State-owned entities that gave huge amounts to the government as special dividends, remitting Sh13.05 billion.

“During the year, National Treasury directed the authority to remit Sh18 billion to the exchequer as special dividends,” KPA said.

“At the close of the year, the authority had remitted Sh13.05 billion which decreased the bank interest earnings.”