Toll parent company Japan Post reports a NZ$515.8 million loss for its first full financial year as a listed company, arising from a $5.2 billion write-down on the Australian logistics business it bought in 2015.
According to The Financial Times, Toll’s operating income tumbled between April and December last year as low global resource prices weighed on the Australian economy and on the company’s core domestic business.
Other news outlets attributed the reduced performance to fierce competition in the Australian parcel industry, as well as redundant operations by independent business units and a high ratio of fixed costs.
In analysing the write-off, The Financial Times also pointed to the “large degree of discretion” Japan Post had initially allowed to Toll’s Australian management, something that Masatsugu Nagato – who became president of Japan Post Holdings last year, but wasn’t involved in the original deal – said would now change.
After bringing in ex-Linfox executive Michael Byrne as managing director and John Mullen as executive chairman, he told the newspaper that communication between Toll and Japan Post would be “closer” now and that governance would be improved by adding Japan Post executives to Toll’s management.
According to The Australian, one of them could be Japan Post’s head of global logistics strategy, Hiroshi Shiraishi, one of the architects of the company’s NZ$7 billion purchase of Toll.
Nagato reportedly also pointed out that Toll would remain the “core” of the overall company’s globalisation plans. “We will continue to position Toll as the platform for global expansion and recover its financial results as soon as possible, and will carry out a structural reform programme to contribute to the enhancement of the group’s corporate value,” the company says.
Part of the programme will reportedly be a renewed focus on “priority regions and businesses”, extensive cost reductions, as well as “customer-centricity, improvement of quality of service, differentiation and fostering an integrated sales-force”.
