Move Logistics Group says it will sell its trans-Tasman vessel, the Atlas Wind, and enter into a time charter model instead.
In a guidance update, the NZX and ASX-listed freight firm said the pilot of the shipping service had demonstrated “encouraging customer support”.
“To create more capacity to support this demand, as well as to de-risk and align with Move’s asset light business model, the company will enter into a time charter model for a larger, more resilient vessel,” it says.
Move introduced the Atlas Wind in January last year after acquiring the ship out of Europe.
It was soon put to work on trans-Tasman freight operations and could carry 366 containers, or the equivalent of 5000 tonnes of bulk cargo.
Based on current trading, Move says it expects normalised EBITDA in the second half of the 2024 financial year to be ahead of its first half result.
In the 1H24, the listed freight firm delivered normalised EBITDA of $13.2m which was above its guidance of $11.5m – $12.5m.
“While the speed of turnaround initiatives has been inhibited by the weak economic conditions which is impacting customer demand across all sectors, early improvements are now starting to be delivered as the company continues to transition towards a sales-led, customer-focused, streamlined organisation,” the company says.
For its warehousing operations, it says the sector is competitive and pricing pressure has increased.
In line with its freight strategy, warehousing is positioning itself to capture a wider range of customers seeking good service value, mitigating the traditional reliance on larger customer groups, it says.
It is expected that the FY24 result will include non-cash impairments related to the carrying value of the Atlas Wind vessel which is to be held for sale and the write down of goodwill in the warehousing business.
Chief executive Craig Evans commented: “While we would have liked the turnaround to be progressing faster, we are pleased to see steady results coming through despite the challenging market due to the strategic choices we are making.”
“We acknowledge that Move’s performance is not yet where we would like it to be, but we have a clear strategy, experienced leadership and are confident we are moving in the right direction to become a stronger, more efficient and more competitive business.”
