Fi­nan­cial line haul

Ef­fec­tive op­er­a­tional strate­gies help lead­ing trans­port rms weather 2017 scal ups and downs, listed com­pany an­nual re­sults show

Australian Transport News - - Contents - WORDS R OB M cKAY

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

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

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

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