Annual results season has produced a mixed bag of outcomes for big players in the trucking, logistics, freight and commercial vehicle industries. Check out how some of the more influential companies fared in our wrap-up below.
TIL Logistics
TIL logistics is reporting a weaker than expected annual result due to weather disruptions and a jump in operating costs.
The transport and logistics group’s adjusted EBITDA earnings, excluding reverse listing costs, was $26.2 million. This is up 49% year-on-year.
The company’s net loss after tax is $12.2 million with adjusted net profit after tax of $7.1 million, up 20% on the prior year.
Its reverse listing on the New Zealand stock exchange in December last year saw non-trading costs of $6.5m for the listing process, $11.6m in share-based payments and $1.2m in revaluation of deferred consideration related to the acquisition of Move Logistics.
Sales revenue of $325.6m and total income of $331.5m was ahead of the FY18 revenue forecast.
A dividend of 2.3 cents per share has been declared for the financial year.
Overall, results were up year-on-year but below expectations at the time of the reverse listing.
Construction industry pressures, rising fuel prices, increased wage costs associated with driver shortage, increasing warehouse rent costs, and higher fleet lease costs had an impact on overall earnings, the company says.
TIL’s freighting division lifted revenue to $220.8m (68% of group revenue), and EBITDA to $7.2m.
Bad weather and big storms hit in the second half of the financial year, closing transport routes and impacting on the transport needs of large customers, particularly in the aquaculture and viticulture sectors.
The Pacific Fuel Haul business performed above targets and was a solid performer for the group including a renewed partnership with Z Energy, with the signing of a long-term, exclusive strategic supply agreement.
The logistics division, which provides warehousing and third party logistics primarily through Move Logistics, posted $97.3m in first year revenue (30% of group revenue) and EBITDA of $7.3m.
The asset management division, comprising the majority of the group’s trucks and trailers, posted EBITDA of $11.4m. The division generates earnings by leasing its assets to TIL Logistics Group businesses.
TIL chief executive Alan Pearson says despite being below forecasts, “the results are a significant uplift on the prior year and the company is well positioned for continued growth”.
“We have been investing in our company, particularly in technology, systems and health and safety, and are continuing to upgrade our fleet of some 900 trucks and 1110 trailers.
“We have a number of initiatives underway to deliver improved trading performance, including the commissioning of three new Move warehouses and technology improvements which will drive efficiencies.
“These initiatives will provide long-term benefit and deliver shareholder value. Major customer contract wins have been achieved in FY19 to date and businesses across the group are experiencing higher activity levels,” Pearson says.
TIL chairman Trevor Janes says the long-term outlook for the company remains positive.
“We have a number of acquisition opportunities which are being carefully assessed against strict criteria to ensure they add value to the group. Management also remain focused on organic growth – increasing freight volumes, improving utilisation, expanding the offer and driving efficiencies.
“There is growing demand for high quality, end-to-end freight and logistics supply chain solutions, and TIL has the reputation, expertise and capability to take advantage of this. The board is confident in the ability of TIL Logistics to deliver continued growth and to increase shareholder value,” Janes says.
Port of Tauranga
Port of Tauranga has recorded an impressive 13% after tax profit increase in its annual results.
That equates to $94.3 million at the end of financial year 2018.
Its annual revenue also increased 10.9% to $283.7 million.
In its statement to the NZX, the company says the results were lifted by increased volumes across all major cargo categories, including export logs (up 14.3% in volume) and dairy products (up 4%).
The number of cars and other vehicles brought into Port of Tauranga doubled compared with the previous year.
“This growth is a direct result of Port of Tauranga’s six-year investment in building capacity to accommodate larger vessels,” company chairman David Pilkington says.
“We completed our capacity expansion programme in 2016 and the effects were almost immediate. We are seeing larger container vessels, as well as larger bulk cargo and passenger ships.”
The company has interests in Northport in Whangarei and PrimePort Timaru, as well as operating inland ports at Auckland and Rolleston near Christchurch.
As for the future, Port of Tauranga chief executive Mark Cairns says a ninth container crane had been ordered for delivery in 2020, with more growth expected.
“We expect cargo growth to continue in the next year across most categories, and particularly containerised cargo.”
Colonial Motor Company
Prominent truck and car dealer Colonial Motor Company has boosted its annual after-tax profit to $24.75 million, up 12.5% on last year.
Colonial owns south Auckland-based Southpac Trucks along with many new vehicle dealerships around the country, including the Ford, Mazda, Suzuki and Isuzu brands.
Colonial says the new vehicle industry has continued to run at all-time record levels in the 12 months to June, but growth has slowed to 2.5% compared with 14% a year ago.
The heavy truck industry has been stronger with growth 13% year-over-year, Colonial says in its report to the NZX.
“Southpac Trucks (with Kenworth and DAF) has grown both its volume and market share in this year. This increased activity is reflected in the balance sheet current assets.”
Colonial has also invested in new and expanded facilities for its dealerships in the last 12 months.
These include:
- At Southpac Trucks in south Auckland the new truck preparation facility has been expanded and an extension is under way to the parts warehouse.
- In Wellington, the newly refurbished retail service facility is close to completion and the waterfront brand hubs for Mazda and Ford are being fitted out. It has also acquired additional land in Lower Hutt adjacent to the dealership.
- In Queenstown, the new dealership for Macaulay Ford and Mazda is under construction.
- In Christchurch, agreement has been reached with crown-owned company Ōtākaro, allowing the South Frame greenway to proceed and the dealership to rebuild on its existing site. Work will commence shortly.
As for the next 12 months, Colonial is being cautious.
“There are currently a myriad of mixed messages influencing the confidence of business and consumers that could influence the medium term outlook for the economy and our industry.”
Air New Zealand
Air New Zealand has posted a record $540 million profit before tax for the financial year.
It’s the second highest result in the company’s history and up from the $527m posted in the previous year’s result. Net profit after tax is up 2.1% to $390 million.
Around 8500 staff will be paid bonuses of $1800 for all permanent employees who do not participate in a short-term incentive programme.
The company will also reinvest around $150m over the next four years to enhance customer service such as cabin experience, digital products and lounges.
Shareholders will receive a final dividend of 11 cents per share, taking the total ordinary declared dividend for the year to 22 cents per share, an increase of 4.8% from the prior year.
Air New Zealand will be leasing three widebody aircraft, two Boeing 777-200s and one Boeing 777-300, as well as making adjustments to its schedule as it continues to work through the maintenance requirements associated with the global Rolls-Royce Trent 1000 engine issues.
Chief executive Christopher Luxon says he is “proud” of the results but acknowledged the impact of disruptions.
“The adjustments to our schedule will essentially free up two widebody aircraft enabling us to provide greater schedule certainty for customers.
“This will include adjusting weekly frequency on our Buenos Aires and Taipei services, as well as seeking to retime our flights to Tokyo’s Haneda Airport.
“We are confident that these proactive steps will result in better reliability for our customers.
“Looking out over the next two years, the airline is expecting to grow by one million customers a year, reaching 19 million customers by the end of 2020,” Luxon says.
Fletcher Building
Fletcher Building has reported a net loss of NZ$190 million for the year to June 30.
This compares to an earnings of $94m in the same period last year.
No final dividend payment was made to shareholders for the 2018 result.
Revenue for the year was $9.4 billion, up 1% year-on-year.
This was driven by a “solid sales performance across core businesses in New Zealand and Australia, offset by a reduction in construction revenues”, a company statement says.
Fletcher Building chief executive Ross Taylor says the results meet the earnings guidance announced to the market in February.
“We have seen volume and revenue growth across a number of our New Zealand and Australian businesses, but these gains have been more than offset by increased costs and our need to invest ahead of plan to meet higher than anticipated market demand.
“With a new strategy in place we have started the new financial year with clear priorities and an operating model that will support us to deliver against them.
“Our focus in FY19 will be on growing our core businesses, continuing to stabilise our construction division, and completing the divestment of non-core businesses Formica and Roof Tile Group.
“In both New Zealand and Australia we expect activity in the residential sectors to decline slightly, while activity in the non-residential, commercial and infrastructure sectors is likely to increase.
“In Australia this will be most pronounced on the Eastern Seaboard, which is expected to benefit from large state and federal funded projects in rail, road, and pipelines,” Taylor says.
