LOGISTICS: Cargo Carriers Finds the Going Tough
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Revenue increased by 4% to R291m, but profit from operating activities was down by 10% to R19.7m. Profit after tax was further impacted by the higher finance costs associated with the renewal and expansion of the fleet, and an unpaid foreign debt which we have decided to provide for, and declined by 24.9% to R10.6m.
The Two Major Segments of Cargo Carriers
The modest revenue growth of 4% masks quite different performances by the two major segments that Cargo Carriers serves.
The industrial division which had boasted considerable market share gains in the second half of the previous fiscal year grew by a very pleasing 18.2%. This result came on the back of an excellent performance in the cement industry, and from our operations in the mining and chemical sectors.
Our sugar business, which had been an underperformer for a number of years has been significantly restructured during the period. We have discontinued contracts that were unprofitable, and have been able to successfully renegotiate two large contracts which will bring sustainability to our business, and higher service levels to our clients. The period reflects a consequent 19.4% reduction in revenue for the sugar division, but we are confident that the upgrade of our equipment, our restructure in this division, and the newly forged contracts will see the agricultural business return to significant profitability in the next financial year.
Striked Cost Cargo Carriers Millions
Sadly, strikes in our customers businesses lost us approximately R10m in revenues, and this together with the R22m of revenues discontinued primarily in the sugar business and on some fuel routes due to poor margin prospects, put the modest 4% overall revenue growth in a slightly improved light. We are confident that the growth experienced in the industrial divisions, and the restructured sugar business will stand the overall business in good stead going forward for cargo carriers.
Business News Sector Tags: Logistics|