K&S first half slips on volatile market


Trucking and logistics firm calls for lower interest rates as customers do it tough

February 23, 2012

Listed transport and logistics firm K&S Corporation has suffered a minor reverse in net profit after tax for the first half of the financial year.

At $7.36 million, the figure was 9.2 percent lower than that recorded in the prior corresponding period.

The result came despite a 2.7 percent rise in operating revenue to $271.8 million.

K&S management put the disappointing result down to the impact of the high dollar on local manufacturing and softening demand for Australian-produced goods.

"Economic conditions during the half year were extremely patchy with many sectors performing below expectation," the company says.

"Monthly customer volumes have been extremely volatile during the period.

"We have seen lower activity levels in the normal peak period of November and December by the steel, timber and paper industries."

K&S also touched on a hot topic of the times – the cost of employment.

"The current economic conditions are making it difficult to fully recover higher labour related costs from the customer base," it says.

"We have seen a decline in our margin during the half year period as a result."

The silver lining is the resources sector, which is "providing opportunities".

With so many impacts outside of its control, K&S was unable to furnish any earnings guidance but it is looking for action from the Reserve Bank and the trading banks.

"We consider more interest rate reductions are required before the economy will be stimulated to a a level where we will see growth from our customer base," it says.

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