Financial line haul
Effective operational strategies help leading transport rms weather 2017 scal ups and downs, listed company annual results show
The financial year end results of four major listed freight transport companies reflect a positive picture. K&S, CTI Logistics, Lindsay, and Chalmers reported improved performance of specific business units owing to various initiatives such as operational efficiencies and cost reduction strategies.
A full year rebound helped K&S hop back on profit track after seeing significant losses in the previous year. Reducing costs across various segments was big on the company’s plan for 2016-17. Its Energy business reported growth owing new contracts but the most significant results came from across the Tasman, with New Zealand business taking a big leap in profits.
For CTI Logistics, revenue and certain market conditions were on a positive
“The board has high expectations of the year ahead”
path despite profit falling from the previous financial year. The company lightened its interest-bearing debt with the help of new earnings, property sales and issues of shares.
Meanwhile, Lindsay was laughing all the way to the bank thanks to an IT system upgrade that helped the company identify $6,158,000 in unclaimed fuel tax credits.
The bounty came as the company saw financial impact owing to weather events including Cyclone Debbie and floods in South Australia that challenged Transport arm’s ability to maximise freight utilisation.
However, bad weather in Brisbane failed to badly hurt Chalmers’ income. Despite significant container damage, the company reported a $1.1 million revenue boost on the back of grain transport increase.
Let’s take a closer look at the performance of each of these players.
Lindsay Australia had six million reasons to welcome the impact of its information technology upgrade, its annual results reveal. During the last financial year, the group instituted an external review of its fuel tax credit processes after an internal exercise identified a possible $491,000 in possible claimable credits.
“The new processes focused on utilising new systems and data, which has been implemented with the recent IT system upgrades. The external review was conducted to ensure the Lindsay Group was using an accurate and reliable methodology to ensure it was claiming the correct amount of tax to which it was entitled,” Lindsay says. “Using the new processes to review prior periods, external consultants identified a further $6,158,000 of fuel tax credits to which the business was entitled. Almost the entire amount had been refunded during the year with the exception of $43,000 receivable at the reporting date.”
Meanwhile, a slight rise in revenues was unable to hold Lindsay to a rise in profits, with South Australia and Queensland weather events doing the damage.
Revenues were up 2.3 per cent to $ 337.7 million compared with the previous fi nancial year but net profit fell 20.4 per cent to $6.4 million. Second-half net profits were $ 487,000 compared with the previous fi rst half of $2.6 million.
The Transport arm, with its 390 prime movers and rigids and 650 trailers, provides two-thirds of the group’s revenue and that rose 1.4 per cent to $227.4 million for a gross profit contribution of $25.1 million, up 10.5 per cent.
The consolidation of sites at Acacia Ridge is expected to boost returns this year. The Rural segment’s revenue was up 5 per cent to $105.5 million but profits were down 3.9 per cent to $3.4 million.
“The board has high expectations of the year ahead. As major capital works are completed, the focus will turn to improving utilisation, operational efficiency and growing our export markets,” chairman John Pressler says.
reported a full-year profit boost. The company expects growth to continue on the back of growing e-commerce market.
Aurizon plunged to a full-year loss, its annual results showed, with its intermodal division to be sacrificed in response. Underlying net profit after tax (NPAT) for the vertically integrated rail provider and infrastructure owner was $187.9 million in the red after FY2015-16’s profit of $72.4 million.
The main culprit was Cyclone Debbie, which affected the crucial Queensland operations, along with weaker freight rates.
These saw gross earnings down 4 per cent to $836 million, while total revenue was just about static at $3.452 billion compared with the previous $3.458 billion. The cyclone impacted the business by approximately $89 million, $20 million in the Above Rail segment and $69 million in Below Rail, which is expected to be recovered in future years. Redundancy costs were $116 million; 924 employees were made redundant across the business.
Helping cash flow was $634.2 million from working capital improvements, reduction in capital expenditure and the sale of its 33 per cent of the Moorebank intermodal project in Sydney.
It has been a tough results offering for Harding, who also oversaw the divestiture of the intermodal business, which lost $162.2 million due to trading performance during the year being lower than expectation. Aurizon Intermodal is a containerised rail and road freight haulage business for retailers, wholesalers and freight
Below: The new Lindsay HQ Opposite: IT upgrade helped Lindsay gain massive windfall
Above: Aurizon’s intermodal business took a big hit in the 2016-17 nancial year