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Polaris’s revenue gets America’s Cup boost

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On the upswing: Polaris, which owns Hamilton docks operator Stevedoring Services, reported a third consecutive annual profit (Photograph supplied)

Polaris Holding Company Ltd reported an annual profit of $1.3 million as America’s Cup-related cargo boosted revenue.

The parent company of Hamilton docks operator Stevedoring Services Ltd said revenue climbed by $968,000, or 8.8 per cent, to $11.92 million in the year ended March 31, 2018.

In its annual report, Polaris estimated that at least $750,000 of that increase was as a direct result of the America’s Cup pushing cargo volumes higher.

The increase in cargo also resulted in a surge in overtime costs, as employees worked around the clock to unload it. Polaris’s expenses climbed $1.02 million to $10.81 million, with payroll accounting for $690,000, or more than two-thirds, of the increase.

Polaris also restated results for the year ended March 2017, raising profit $140,000 to $1.36 million, due to a change in accounting for parts, which are now being treated as fixed assets amortised over a four-year period instead of as inventory items, as they were previously categorised.

Cheryl Hayward-Chew, chairwoman of Polaris, wrote in the annual report: “It was all but impossible for Polaris not to achieve a stellar fiscal 2018. With America’s Cup hitting Bermuda like a tsunami, it soaked prosperity into the island for well over 12 months, and pushed imports to levels never before seen.

“It would have been easy for Stevedoring Services to profiteer from this bounty, and to pump rates higher as it met an insatiable demand. Instead the company provided concessions, worked its weekend gate while waiving overtime, offered concessions on oversized America’s Cup containers, and contorted to prioritise the fast and steady flow of cargo.”

Polaris said it achieved a return on equity of 12.3 per cent.

The results mark a third successive profitable year for Polaris under the stewardship of Warren Jones, the chief executive officer, who has overseen a transformation from a company that made was making substantial losses when he took over in January 2014.

“We are not the company you read about and may remember from a half dozen years ago,” Mr Jones said.

“That company had lost its way and by nearly every measure was in cardiac collapse. Today’s Stevedoring Services is a model for the country. We are a healthy, focused, customer-centric business and we anticipate a successful future ahead.”

Polaris’s shareholder’s equity has grown by $2.8 million over the past three years to $11.02 million. Its annual dividend has climbed 60 per cent, from 20 cents per share to 32 cents, while the company’s share price on the Bermuda Stock Exchange has climbed more than 61 per cent, from $3.11 to $5 per share.

Polaris’s terminal operating licence will expire in February 2021 and the company is seeking a long-term renewal.

Mr Jones said Stevedoring Services had invested more than $5 million in cranes and heavy equipment during the past 30 months and hundreds of thousands of dollars more on a new computer operating system. In addition, the company has invested in its staff, with “a blizzard of training and accreditation and certifications”.

“I believe it would be both a tragedy and an injustice for the company, the union, and Bermuda as a whole if that momentum was derailed,” Mr Jones said.

“We believe we have been doing a solid job managing Bermuda’s Hamilton port; at least that is what the freight lines, our customers and our staff have been telling us. We are hoping for a long-term renewal.”

Polaris’s annual report can be accessed at www.polaris.bm/annual-report/

Future focus: Warren Jones, Polaris CEO