Revenue growth in most sectors seen as vindication of continued diversification
China-facing freight firm Wiseway Group paints an optimistic picture of its operations in its full-year financial report.
In particular, it notes its export air freight has been complemented by organic growth in perishables, sea freight, imports and distribution, and road transportation business in Australia and New Zealand.
Revenue is recorded as $102.6 million for the year, up $8.1 million or 9 per cent on the prior corresponding period (pcp).
While its dry air freight core business was down 8 per cent on the pcp, Wiseway’s revenue from new business divisions increased by 208 per cent from $7.4 million to $22.8 million during the year.
This includes:
- particularly strong growth in perishables, including fresh produce, seafood and dairy products ($6 million or 231 per cent)
- investment in Wiseway’s logistics network and facilities contributing to growth in sea freight ($2.7 million or 270 per cent)
- increased demand in e-commerce, strong growth in imports and distribution ($2.3 million or 144 per cent)
- supporting services, including Road Transportation, Airnex, and the Shanghai office increasing from $2.2 million in the prior year to $4.6 million
- contribution from the newly launched New Zealand business of $2 million.
Gross profit was $27.9 million, up $7.1 million or 34 per cent, while operating expenses were $22.9 million, up $2.2 million or 11 per cent, due to investment in infrastructure and increased staffing levels to create better capacity management, the company notes.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was $5 million.
But a statutory net loss after tax of $3.4 million, primarily attributable to depreciation expenses and new accounting standards, was slightly down on last year’s $4.9 million.
More on Wiseway’s Wuhan mercy dash, here
“Wiseway’s strategy of diversifying its business and income has delivered a step-change in net operating cash flow,” CEO Roger Tong says.
“This was particularly evident in the second half of the year, which was driven by strong demand for new service offerings on our expanded platform – sea freight, perishables, imports and distribution, and road transportation.
“Our transformation into a truly integrated logistics service provider has contributed to substantial growth in revenue, up 9 per cent to $102.6 million.
“Notably, the revenue portion of the new businesses as a percentage of the total revenue, has increased from 5 per cent to 22 per cent since the IPO in October 2018.
“Our ability to now deliver integrated logistics services and maintain freight capacity in a tightening market, has enabled us to win new customers, particularly the larger Australian importers and exporters.”
For the year ahead, Wiseway notes it has been an essential service provider during the Covid-19 pandemic and will continue to be one during recovery.
“The scale and breadth of Wiseway’s business will enable it to take advantage of emerging trends and growing demand for logistics services,” it says.
“Post 30 June 2020, Wiseway has maintained a strong financial position, with sufficient cash facilities to support the business. The first month of FY21 has seen trends from 2H FY20 continuing.
“The company’s future capital requirements are not substantial as all expansion projects envisioned pre-IPO have now been completed.
“The macro-economic outlook remains volatile.
“However, Wiseway’s transformation, strong financial position, and experienced management team should enable Wiseway to continue its positive momentum and be at the forefront of the changing dynamics of the transportation and logistics sector.”