Chalmers in first half loss due to market torsions


Shifting container scene, sector fluctuation and drought hurt returns

Chalmers in first half loss due to market torsions
Chalmers is in transition

 

In the face of a container management scene, Chalmers has seen its net profit plummet in the first half of the financial year.

The container logistics, services and haulage firm recorded a $2.6 million net interim loss, down 227 per cent from the previous first half’s $806,619, on a 3 per cent fall in revenues to $31 million.

Chalmers put the loss down to pressure on its Melbourne and Brisbane container parks, with both "currently experiencing historically record low stock levels and gate moves".

This has been exacerbated by the intense drought leaving fewer grain containers needing repair.

"As a result, more containers are being evacuated from Australia for repair overseas meaning less work for the Chalmers container repair business," the company says.

"This is coupled with the effect that direct terminal de-hire of containers in having on the performance of the Chalmers’ container parks."

Its management is now exploring "alternative strategic options for the utilisation of these assets".

Direct terminal de-hire by container lines has roiled container logistics sector in major capital city ports, particularly but not exclusively in Sydney.


Read how container de-hire was an issue for Chalmers last financial year, here


Chalmers Tank Service has also had a hard half following the completion of a chemical waste processing project, leading to a shift away from project work to waste processing services.

The silver lining has been the remainder of the firm’s Queensland operations, with new mining and timber import and export work offsetting drought impacts.

Melbourne logistics operations saw growth from imported construction material, exported cotton and manufactured goods, but transport operations there suffered from lower exports, leading management so seek diversification to reduce that segment’s "exposure to cyclical fluctuations affecting specific industries".

The Transport and Container arms had revenues of $22 million and $8.6 million respectively, leading to losses of $12.5 million and $1.3 million.

The previous first half, these figures were $20.8 million and $10.8 million leading to profits of $743,255 and 512,081.

Costs growth for the half was relatively modest, with employee expenses up from $12.2 million to $12.8 million, vehicle and equipment up from $5.58 million to $5.67 million subcontractors up from $1.99 million to $2.4 million.

Given the loss, directors assured the market that the firm would continue as a growing concern pointing to management and structural changes following a review, including:

  • a new business and development structure
  • financial performance focuses for underperforming segments
  • cost reductions
  • an expectation of sufficient cashflow for the next 12 months.

 

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

 

Trucks For Hire | Forklifts For Hire | Cranes For Hire | Generators For Hire | Transportable Buildings For Hire