Imperial Logistics reports unsatisfactory business performance

Shipping operations negatively impacted by the lowest water levels on the River Rhine in recorded history

Imperial Logistics reports unsatisfactory business performance Bild: Imperial Logistics

Imperial Logistics delivered an unsatisfactory operating performance, growing revenue from continuing operations by 6% and decreasing operating profit by 9% for the year ended 30 June 2019. Results were supported by a good performance from African Regions, offset by weaker operational performances, certain once-off trading costs of EUR 4 million, and the once-off costs associated with business rationalisation and restructuring in the group’s South African and International operations.

Logistics International delivered an unsatisfactory result with revenue in Euro maintained in comparison with the prior year while operating profit declined by 32%. Revenue increased by 6% and operating profit decreased by 29% in Rand which was 5% weaker on average against the Euro during the year.

Performance was negatively impacted by significant once-off costs incurred during the year resulting from the material business restructuring (EUR 9 million) and the prolonged impact of the implementation of WLTP (EUR 4 million) that resulted in significantly lower vehicle production volumes in the automotive business. Excluding the once-off costs, operating profit in Euro decreased by 9% year on year.

The shipping business performed well during the year. Despite the European inland shipping business being negatively impacted by the lowest water levels in recorded history in H1 F2019 the impact was largely mitigated by the business increasing freight rates in the chemical fleet and receiving partial compensation from customers due to additional costs incurred.

Lower volumes and higher costs in the automotive, retail, steel, chemicals and industrial segments, resulting from macroeconomic challenges, further hampered performance as these cost increases could not be passed through to clients, negatively impacting margins. Palletways continues to contribute positively and good progress has been made in appointing additional members and changing the pricing model to address the increased costs caused by the network imbalances.

Imperial Logistics Limited is mainly an African and Eurozone logistics provider of outsourced, integrated freight management, contract logistics and distributorships. Ranked among the top 30 global logistics providers, the group is listed on the JSE in South Africa and employs over 27,000 people in 32 countries. With a focus on five key industry verticals — automotive, chemicals, consumer, healthcare and industrial — the group’s deep experience and unrivalled ability to customise solutions ensures the ongoing relevance and competitiveness of its clients.