Refrigerated Logistics division hurt by sale uncertainty and IT issues
Vehicle sales and refrigerated logistics firm AHG has seen its annual profits fall more than a third, in a year that saw its cold freight arm sale collapse.
Net profit after tax (NPAT) was down 41.4 per cent from $55.5 million to $32.6 million, even as revenues rose from $6.11 billion to $6.47 billion, an outcome the company had flagged in May.
This was impacted by one-off costs including $7 million in net costs of the Refrigerated Logistics transformation, $7.8 million in operations restructuring and discontinued operation, $25 million on impairments to IT, plant and equipment, goodwill and franchise rights, and $2.3 million on integration, acquisitions and MD transition.
Chinese firm HNA’s inability to follow through with its intended of the Refrigerated Logistics business, revealed on July 2, didn’t help, with that arm losing $2 million despite it gaining revenue of $598.3 million, up more than $3 million on the previous year’s $595.1 million, and increased margins.
Read how HNA walked away from the Refrigerated Logistics deal, here
Its “reportable segment result after unusual items” line, which records non-recurrent items, sees a loss of $45.9 million from a loss of $8.5 million the previous year.
The segment losses were “primarily due to higher depreciation.
“Second half revenue and earnings were significantly impacted by the disruption and uncertainty caused by the offer from HNA to buy the business and by the systems implementation program.
“The critical components of the program (the implementation of the Transport Management System, Warehouse Management System and ERP) are now substantially complete.
“We now have an IT platform that enables a single view of operations, fleet and our customers.
“This combined with the largest network of refrigerated logistics assets in Australia gives us an opportunity to leverage this platform to drive earnings and deliver superior customer value.”
The company’s Franchised Truck division, set up 16 months ago, has a good story to tell, with the firm reporting significant synergies and opportunities realised by forming a national truck structure, strong long‐term relationships with leading manufacturers and the possibility of further acquisitions.