Toll buoyant after JP cuts losses on Global Express

Knudsen and Stokes emphasise headway made on recent challenges

Toll buoyant after JP cuts losses on Global Express
Japan Post looks to life after Global Express


Toll Global Express comes back to haunt Japan Post (JP) one last time as the parent company releases its annual results ending March 31, 2021.

JP concedes it gave up on Global Express as it continued to bleed financially, to the tune of $78 million last Japanese financial year, in the Toll portfolio that also includes Global Logistics and Global Forwarding.

Positively for JP, Toll Group’s bottom line sees revenue and earnings before interest and taxes (EBIT) rise to $9.84 billion and $46 million, respectively.

Operating income inched towards the $10 billion mark, increasing by A$1.28 billion (or 14.9 per cent year-on-year), "due mainly to continuing large-scale handling of Covid-19 prevention supplies by the Global Logistics Asia division through the fourth quarter of the fiscal year", JP explains.

While operating and other expenses increased in conjunction with operating income, personnel expenses decreased, resulting in a return to profit, after a loss of A$117 million in the prior corresponding period.

The profitable Global Logistics business saw EBIT of $168 million, jumping well above the A$94 million of FY20 but below the A$210 million recorded in FY19.

Global Forwarding was also in the black by A$4 million, where it had previously been in deficit by A$30 million and $8 million in the last two financial years.

Corporate/Other shortfalls also declined, from $80 million in FY20 and $56 million in FY19 to $48 million in FY21.

Meanwhile, Global Express’s deficit of A$78 million adds to the A$100 million and A$18 million lost respectively in the previous two years, leaving its new owners Allegro and CEO Christine Holgate with plenty to do.

How Allegro swooped on Holgate to lead Global Express, here

Conceding it had been "persistently operating at a loss", JP discloses a "loss on the sale of Toll’s Global Express business" of Yen67.4 billion, equating to about A$793 million, having previously put the sale price as A$7.8 million.

"In the international logistics business, we continuously engaged in the transformation plan of Toll Holdings Limited," JP explains.

"We also continued to expand B2B businesses mainly through our contract logistics, utilising JP Toll Logistics.

"Business results continued to be lackluster, however, with 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, etc.

"The Japan Post Group has considered various business strategical options to enhance Toll’s growth, but ultimately decided that the best option would be to sell the global express business, which has experienced a continuing deterioration in business performance."

On April 21, 2021, JP finalised the "transfer Toll’s global express business to Australian Parcels Group Pty Ltd, Australian Parcels Pty Ltd, Tasmania Maritime Pty Ltd and NZ Logistics Holdings Limited, affiliates of Allegro Funds Pty Ltd."

Both Toll Group managing director Thomas Knudsen and Global Logistics president Peter Stokes took to social media to comment optimistically on the company’s results.

Knudsen says that "the last 12 months has truly been a year like no other; requiring resilience and agility at every turn in response to the fast-changing environment driven by Covid-19."

"We had zero fatalities and improved on our overall safety outcomes, while keeping our people safe from the virus with strict controls across our global operations.

"Despite a very challenging operating environment, Toll made strong headway on the previous 12 month's financial results with strong improvements in both revenue and earnings.

"It’s clear that we’re on the right path for growth.

"This result would not be possible without the dedication of our staff and the support of our customers and partners. I want to thank my colleagues at Toll for delivering such a great performance."

In a similar theme, Stokes spruiks the virtues of his division on the financial and safety fronts.

"After a year of headwinds, Toll Global Logistics delivered a strong performance, posting an EBIT of $168 million for FY2021, almost double the prior year," he says.

"Importantly, our safety performance continues to improve and the whole team has rallied to stay safe during the pandemic.

"Pleasingly, Toll has had zero workplace transmissions across our operations around the world.

"Our results today mark a turning point.

"While we have more work to do, I’m proud of the team and what we have been able to deliver in the face of many challenges.

"We’re focused on continuing to deliver for our customers, delivering on our strategy and building a sustainable business for the future."


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