Trailer Magazine

K&S releases performance update

  • Posted on Wednesday 27th, November 2019.

Transport and logistics group, K&S Corporation, confirms trading conditions remain challenging despite reporting a statutory profit after tax of $2.3 million for the year ended 30 June 2019.

Operating revenues for the period were $905.2 million, 7.2 per cent higher than the prior corresponding period, according to K&S Chairman, Tony Johnson.

The current year underlying profit before tax was $3.2 million, a decrease of 70.5 per cent on the prior corresponding period. Adjustments were made for a number of 'significant' items including the benefit from the finalisation of the Aurizon rail claim and costs associated with several restructuring activities.

Included in the Company’s statutory result  for  the year was a $9.5 million (before tax) accounting gain relating to the settlement of claims arising out of the closure of Aurizon’s intermodal business in December 2017 and $9.2 million of non‐recurring accounting charges including impairment costs, which  primarily  relate  to K&S' exit from its WA General Freight business

Operating cashflow for the year was $61.8 million, 51.5 per cent higher than for the previous year. 

Operating cashflow reportedly benefitted from the receipt of $25 million in settlement proceeds from Aurizon and a focus on working capital management. 

"The Australian transport business has had a mixed year," said Johnson.

"Our contract logistics business grew revenues and profit contribution and steel volumes from our major customers also remained strong.

"However, the chemical transport division (Chemtrans), K&S Energy, the WA General Freight division and the South West WA division all experienced a disappointing year," he said.

Johnson said the New Zealand business delivered revenue and profits up on FY2018. "While our major  customers are all contracted, we also  continue to  strive  to  further  diversify  our New
Zealand business," he said.

K&S Fuels is also up on revenue and profit year-on-year however the fuel retailing and wholesaling markets are 'dynamic' and 'exhibit a high level of competition' according to Johnson.
K&S Managing Director and CEO, Paul Sarant, said the business has remained consistent with its strategies, focusing on the creation of customer supply chain value, operational cost reductions, sales growth, market diversification and differentiation, and using IT as a key enabler.

"We continue to action objectives and strategies to grow our business and improve its financial
performance, to ultimately provide our shareholders an improved return on their funds," he said. "Cost reduction and working capital strategies have continued to be implemented across the business. 
We also continue to review the business in detail to ensure that all activities generate an acceptable rate of return."

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