James to hand over Qube leadership to Digney


Company first half profit up as it rides out pandemic impacts

James to hand over Qube leadership to Digney
Paul Digney

 

Qube MD Maurice James, one of the nation’s most successful logistics industry executives, is to make way for chief operating officer Paul Digney on June 30.

James retires formally from Qube at the end of December but will take up a guidance and mentoring role.

"Maurice indicated his desire to retire early last year but agreed to stay on to lead Qube through the Covid-19 pandemic and to the conclusion of the Moorebank monetisation process," chairman Allan Davies says, adding that Digney was a unanimous replacement choice by the board.

"Paul has spent his entire working life in the port and logistics industries and was part of the original team which managed the assets which would later form the basis of Qube Holdings Ltd.

"Since his appointment to the role of COO in 2016, Paul has been accountable for all operations across the Logistics, Ports and Bulk Division which deliver the majority of Qube’s revenues.

"Paul is, in our view, unquestionably the right person for the job of leading Qube.

"Maurice has been critical to Qube’s outstanding success. He has led Qube from the beginning and is widely regarded as a doyenne of the stevedoring and ports industries having worked for the Port of Melbourne in the mid-eighties and then joining Patrick in the early nineties ahead of the waterfront reform process."

James says the time is now right to step back as the monetisation of Moorebank is nearly complete and the company was recovering well from the effects of the pandemic.

"I am very thankful and proud to have led Qube for a decade during which I believe we have built a unique business which has reshaped the import and export supply chains, delivered world class efficiency for our customers and strong returns for our shareholders," he adds.

"Paul will be a strong leader as he has been instrumental to the development of Qube’s integrated logistics model and acquiring key strategic businesses and assets since Qube’s inception."

Digney pays tribute to James, saying: "It has been a privilege to work with Maurice for over 20 years. I know I speak for many of us when I say Maurice has been a great leader and mentor to us during his time at Qube.

"I am very excited with the opportunity that the Board has given me to lead the fantastic Qube team into our next growth chapter."

Half-year results

The news comes as Qube chalks up an 11.8 per cent rise in first half profit compared with the prior corresponding period (PCP) to $57.8 million, despite a 1.9 per cent fall in revenue and other income to $939.3 million.

With accounting standards changes still affecting how results are reported, Qube notes that the Operating Division reported underlying revenue growth of 2.2 per cent to $940.9 million, including $521.6 million in the ports and bulk activities, $380.9 million in the logistics activities and $38.4 million for AAT.

 "The positive overall result again reflects the benefits of Qube’s diversification strategy with growth in most bulk commodities, as well as oil and gas related activities more than offsetting lower volumes of coal, lithium and motor vehicles," the company says.

"The ports activities benefitted from some improvement in certain stevedoring volumes including fertiliser, scrap and steel.

"Energy related volumes were also positive, benefitting from Qube’s supply base activities, the contribution from the Shell contract, and Qube’s BOMC facility in Indonesia also made a positive contribution as projects utilising this facility started to increase their activities.

"Forestry volumes from New Zealand continued to be solid and were considerably ahead of the prior corresponding period.

"These factors were partly offset by lower volumes of motor vehicles, containers and forestry volumes from Australia."

 


Read how Qube saw out last financial year, here


 

These were down on the PCP, partly reflecting ongoing global supply issues due to Covid-19 and  the Melbourne lockdown.

Towards the end of the period, Qube also experienced some reduction in log export volumes out of Australia as a result of trade sanctions from China.

Logistics

It describes the logistics result as "credible" given ongoing competitive conditions as well as the lockdown impact.

"The result benefitted from high activity levels at Qube’s warehousing and container handling facilities as a result of growth in container volumes through the ports," the company says.

"There was also a full period contribution from the Quattro acquisition not present in the prior year’s results as well as an improvement in agriculture related volumes, which is expected to continue over the remainder of the financial year.

"The logistics business also benefitted from increased revenue from infrastructure work from existing customers and freight forwarding activities from volume increases (including from Covid related products such as face masks)."

New accounts gained in meat processing and increased dairy volumes helped.

AAT delivered a significant improvement in its financial performance compared to PCP, principally as a result of increased general and project cargo volumes.

"Given the relatively high fixed cost nature of AAT’s business, the higher volumes had a positive impact on AAT’s earnings at Port Kembla (New South Wales) and Appleton Dock (Victoria) terminals," Qube reports.

During the period, AAT finalised a long-term lease extension at Fisherman Island (Queensland).

The associates in the division (ex-Patrick) delivered an overall contribution to underlying NPAT of around $200,000 compared to $1 million in the PCP.

In December, Qube increased its indirect interest in Prixcar from 25 per cent to 50 per cent – the same percentage as its Patrick holding – for $500,000.

Patrick

"Qube received $30 million in cash distributions (comprising dividends and interest income) from Patrick in the period, with an additional $17.5 million distributed to Qube in February 2021, reflecting Patrick’s high cashflow generation," it says.

It notes that civil works for Port Botany Rail development phase 1 were done during the period with advanced automation commissioning and testing on the cranes nearing completion.

"The automated rail terminal is expected to be fully operational by Q4 FY21 providing increased rail windows and more efficient rail turnaround times.

"During the period, Patrick also completed the national roll out of the new Navis N4 Terminal Operating System delivering workforce synergies and other efficiencies and introduced a new container weighing system, currently being tested in Fisherman Island (Queensland), which is expected to help drive safety outcomes."

 

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