Japanese parent firm sees subsidiary’s restructuring continue; notes cyber attack
The Japan Post (JP) business segment that contains Toll’s operations has sunk to a solid loss, financial year results to March 31 show.
While the International Logistics business segment, made up of Toll, JP Toll Logistics and Toll Express Japan, had seen fair conditions the previous financial year, a combination of global issues have converged for a A$244 million earnings before interest and tax (EBIT) reversal and plunged it firmly into the red.
“Operating income decreased, affected by a decrease in the volume handled due to the spread of COVID-19, as well as targeted cyber attacks suffered by Toll in January 2020, amid persistently slow growth in the Australian economy,” JP says of the segment that reports in Australian dollars and Japanese Yen.
“Fixed costs such as personnel expenses weighed on income, resulting in a net operating loss (EBIT) of A$117 million.
“Extraordinary losses were also recorded, including losses on impairment of fixed assets.”
Within the segment, the global logistics business continues to do the heavy lifting as it has done in the last two years, but its profit of A$82 million – down from A$191 million in 2018 and A$148 last year – was overwhelmed by the combined losses of global forwarding, global express and corporate/other arms of $199 million.
Last year, those losses were $26 million with nothing contributed either way by corporate/other.
Read the latest on Toll’s cybersecurity battle, here
“In the international logistics business, we continued to engage in transformation plan of Toll Holdings Limited, a consolidated subsidiary of Japan Post Co,” JP says in its consolidated financial results.
“A new president was appointed in January 2020, and the company embarked on further transformation plan.
“We also continued to expand B-to-B businesses mainly through our contract logistics, utilising JP Toll Logistics Co., Ltd.
“Business results for the fiscal year ended March 31, 2020 continued to be lackluster, however, with the impact of a harsh external business environment, due a slowdown in the Australian economy, “US-China trade frictions and the spread of COVID-19, further compounded by the effect of cyber-attacks.
“As a result of these initiatives, fixed costs such as personnel expenses weighed on results, in addition to the effects of the foreign exchange rate, and ordinary income amounted to ¥635,194 million [A$9.2 billion] (down ¥66,062 million year-on-year), net ordinary loss amounted to ¥21,447 million (net ordinary income of ¥5,094 million in the previous fiscal year), operating income in the international logistics business of Japan Post Co. amounted to ¥634,954 million (down ¥65,695 million year-on-year) and net operating loss (EBIT) in the international logistics business of Japan Post Co. amounted to ¥8,683 million (net operating income of ¥10,300 million in the previous fiscal year) for the fiscal year ended March 31, 2020.”