Flood impacts and reduced demand in some areas hit bottom line
K&S Corporation reports that, based on available information, it anticipates its underlying profit before tax for this financial year will be between $3 million and $4 million.
The company’s statutory profit before tax for FY19 expected to be between $9 million and $10 million, it notes, which would mark a decrease on last year’s profit before tax of $24.6 million.
“The statutory result includes a $9.5 million (before tax) accounting gain relating to the settlement of claims arising out of the closure of Aurizon’s intermodal business in December 2017 as well as other known one-off business restructuring costs,” it says.
“As previously announced, increased costs are being incurred in our rail transport operations under arrangements entered into with Pacific National in January 2018 following the closure of Aurizon’s intermodal business.”
Read more on K&S’s profit in a challenging first half, here
K&S also notes its chemical transport division, Chemtrans, experienced reduced market demand and its fuel cartage arm, K&S Energy, experienced strong margin pressure.
“Operations in both of these divisions were impacted by the severe flooding that hit northern parts of Queensland in February 2019,” it adds.
The company’s contract logistics operations, New Zealand, and other fuel divisions “generated sound results in FY19”.
However, “ongoing cost reduction strategies have continued to be implemented across our business”.
“Our review of the industry segments in which we operate, as well as the ways in which we offer our services to the market, is ongoing.”
The current focus of that review includes the general freight businesses in Western Australia, South Australia and the Northern Territory.