CTI Logistics forecasts interim earnings boost

Covid-driven demand in home state proves a welcome boon

CTI Logistics forecasts interim earnings boost
CTI remains optimistic despite the uncertain times


Listed Western Australian firm CTI Logistics’ profit guidance indicates a half-year improvement to its bottom line.

It points to Covid-spurred demand in its home state and new market opportunities as improving its performance on the prior corresponding period (pcp).

"Revenue growth for this financial year up to 31 October 2020 is 7 per cent up on the previous corresponding period across both the transport and logistics segments," the company notes.

"This has been driven by growth in demand for transport and warehousing services due to a number of factors including improved retail sales of CTI customers, increased demand in online volumes and related parcel activity as well as changes in customer supply chains to ensure sufficient product is available close to the point of sale.

"The growth in demand, in part driven by additional activity related to Covid, coupled with new opportunities, as well as ongoing cost control measures has seen the EBITDA margin excluding receipts relating to JobKeeper for the financial year to date increase to between 8 per cent and 9 per cent (before accounting for AASB 16 lease adjustments), significantly up on the corresponding period to 31 October 2019 at 6 per cent."

Only revised accounting standards marred otherwise steady CTI yearly results

Despite its gains, CTI maintains uncertainty associated with Covid and varying state-based restrictions remains ongoing, which may impact its bottom line into the second half.

"We remain cautious that trading volumes and activity could slow once all borders open.

"The safety of our staff, customers and suppliers remains a key priority and significant costs have been incurred to ensure CTI provides a Covid-safe work environment."

"The company continues to generate strong cash flow and continues to invest in information technology to enhance our operating systems and performance, in both transport and warehousing."

The complete results for the half-year to December 31 will be released in February.


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