AHG to restructure refrigerated logistics division

Revenue up but cold transport and warehousing arm continues to disappoint

AHG to restructure refrigerated logistics division
AHG is tackling woes in its transport arm


The tough first half times besetting Automotive Holdings Group’s (AHG’s) transport arm held for the full year results even as revenues and profits continue to grow.

Net profit after tax was up 2.2 per cent on last year to $90.1 million while revenues grew 7.2 per cent to $5.63 billion.

Refrigerated logistics arm revenues fell 4.7 per cent to $580.4 million and earnings before interest, tax, depreciation and amortisation (EBITDA) were down 17.9 per cent to $37.2 million, resulting in "a substantial transformation program" being implemented.

"The business is in the process of a substantial program to upgrade technology platforms, leverage operational efficiencies, drive productivity and cost outs," MD Bronte Howson says.

 "We have in place a clear plan to achieve these objectives which will improve our operating performance and financial returns, whilst remaining focused on business development to grow revenue in FY2017.

"This plan is expected to deliver improvements in EBITDA in FY2017 and create a market leading refrigerated logistics business in Australia that is well position in the Asian food bowl."

The woes were put down to lower east-west volumes due to the Western Australian mining downturn, increased product volumes delivered direct to ports of consumption and more downward pressure on rates.

The division also suffered a $2 million increase in NewSouth Wales iCare workers compensation premiums, $1 million spent on prime movers being moved to operating leases and increased depreciation and amortisation from investment in facilities and fleet.

Along with IT developments, the response aims to provide a revised operating model and organisational structure.

This will see four transport segments – fresh, chilled, frozen and general – a standalone warehouse division and a single commercial structure.

Fleet age will fall from its current average of about five years and ther will be greater use of B-doubles.

You can also follow our updates by joining our LinkedIn group or liking us on Facebook