CWT, the supply chain logistics solutions provider, has posted a net profit attributable to shareholders of $33.9 million for the financial year ended 31 December 2009 (FY09), a decrease of 54% from $73.9 million in FY08.

Revenue grew 4% to $623.9 million, with major contributions from the mainstay warehousing segment and the soft commodity logistics business in Europe. This was partially offset by the decrease in contribution from the Non-Vessel Operating Common Carrier (NVOCC) freight forwarding business due to lower freight rates and volume in FY09.

As logistics businesses typically fetch better margins than other business segments, this resulted in a 29% improvement in gross profit to $86.7 million, with a gross profit margin of 13.9%.

During the period under review, the group reported a lower other income due to the absence of exceptional gains recorded in FY08.

Coupled with the incremental administrative expenses due to newly acquired entities in Europe since November 2008, the group’s bottom line performance decreased by 54% to $33.9 million, which equated to basic earnings per ordinary share of 5.91 cents (FY08: 12.87 cents).

CWT says it continues to maintain a healthy balance sheet with a net asset value per ordinary share of 53.9 cents as at 31 December 2009.

The directors proposed a final one-tier cash dividend of 2 cents per share for FY09.

Corporate updates
Last October, Phase 2B of the CWT Commodity Hub was fully completed. The group says warehouse space in Phase 1 is now fully occupied with Phase 2 warehouse over 70% booked as of now.

Early 2010, the group revealed the plan for proposed sales and leaseback transactions of its two primary assets, CWT Commodity Hub (recently completed in October 2009) and CWT Cold Hub, and subsequently gained shareholders’ approval in February 2010.

The transaction was intended to sell these properties to Cache Logistics Trust (CLT), a newly set up trust currently awaiting listing approval from MAS.

Once the deal materialises, the group is expected to reap a one-off gain of $157.7 million out of $445 million gross proceeds, which will serve as a strong war chest for CWT’s future expansion plans and repayment of bank borrowings.

To further enhance CWT’s capabilities as an integrated solutions provider, the group acquired a 70% stake in Force 21 Equipment, a regional solutions provider for security, defence and rescue gear and equipment, which sharpened the Group’s competitive edge in the niche defence logistics sector.

In addition, CWT also committed a 35% investment in Westford Trade Services (WTS) in January 2010. WTS specialises in trade finance facilitation services, which proved to be synergistic with the group’s commodity logistics business and collateral management services.