Qube annual results surf on volumes wave


‘Increased landside and ancillary charges’ help boost Patrick bottom line

Qube annual results surf on volumes wave
Qube has lifted it bottom line

 

Qube Holdings saw a rise in bottom-line profits for the 2021 financial year, driven in large part by its operating division and stevedore Patrick.

Net profit after tax (NPAT) rose 4.7 per cent to $91.6 million, though other lines of the results were complicated by the treatment of discontinued operations, mainly Moorebank Logistics Precinct (MLP). This leads the company to include pre-amortisation NPAT (NPATA).

Revenues rose 14.5 per cent to $2.17 billion.

"This strong result reconfirms Qube’s robust diversified logistics strategy as the driver of earnings growth even during a pandemic," Qube MD Paul Digney said.

"The second half of FY21 was particularly robust as the economy recovered from the effects of Covid and Qube also benefitted from a strong grain harvest.

"Despite the recent resurgence in the virus, we believe the outlook for Qube in FY22 is positive."

Though its efforts to reduce emissions failed to make much of an impression, it had expanded the Euro 5 and 6 truck fleet and has been and will keep expanding renewable energy installations.

It is also looking to make emissions and efficiency gains through technology.

Its results presentation noted: "Qube is investing in assets and technologies consistent with reducing carbon emissions which included alternate fuel options (inject technology/diesel alternatives), vehicle enhancements technologies (Smart-Truck) and seeking alternative power sources (battery) for heavy vehicles."

Its annual report added: "Qube is committed to innovation as it provides a drive to embrace the future and as such there are a number of commercially sensitive projects Qube is actively developing which will provide real and measurable benefits for warehousing, port precinct transport and training programs."

Qube has adopted or is developing:

  • face-recognition technology and developed site access control and body temperature checks interfaces to enhance the functionality of the system
  • the next generation of port-precinct high productivity vehicles
  • a "Smart-Warehouse" platform that provides the ability to scale robotics and automation in the warehouse space dependent upon the customers requirements
  • visual reality learning applications to assist with closing the skills shortage in some regions/sectors.

Qube attributes the reduction of its Critical Incident Frequency Rate from 1.5 to 0.3, to its "leading-edge Fleet Monitoring Centre, which has successfully avoided truck rollovers while improving Qube’s critical risk verification and inspections".


Read how the previous financial year treated Qube, here


Following high-profile transport and logistics cyber-crime activity, it has utilised "technologies and processes to protect systems and to detect and promptly respond to unauthorised or inappropriate activities.

"These controls include, but are not limited to, e-mail filtering, anti-virus software, security awareness and training, as well as the use of penetration testing across Qube’s network."

Patrick

Qube's half of stevedore Patrick again delivered a strong contribution to the full year result.

"Patrick benefitted from growth in market volumes and increased landside and ancillary charges, although was adversely impacted by industrial action in the period," the company said.

Total distributions to Qube were $120 million, compared to $20 million in FY20.

The underlying contribution was $41.3 million NPAT and $50.8 million NPATA, up 58.8% and 47.2%, respectively.

"The statutory contribution to Qube’s NPAT (being interest income on shareholder loans and share of profit after tax) was a profit of $27.7 million (compared to $7.5 million in FY20)," Qube said.

"Variances to underlying results are largely driven by the impact of the leasing standard (AASB 16)", an issue that continues to affect listed freight and logistics companies.

Qube notes Phase 1 of the Port Botany Rail Development was completed in December 2020 "on time and budget".

After commissioning and testing, the automated rail terminal began operations at the end of June with all trains now being serviced by the automated rail terminal and the manual operations ceasing.

Phase 2 civil construction works have now also begun, and when fully complete in mid next year "these works will provide a significant increase to rail windows and rail efficiencies at Port Botany".

It is also progressing with a rail terminal at Melbourne’s East Swanson Dock, with construction due to begin in FY22.

It has continued with the planning approval process for the future development of the Beveridge intermodal site, north of the city.

Moorebank

Once MLP is "monetised", through its sale to property group Logos for $1.68 billion, Qube will effectively consist of 2.5 divisions: Qube Logistics & Infrastructure; Qube Ports & Bulk and 50% of Patrick.

"Qube will emerge with a more predictable earnings profile from its attractive, highly diversified logistics operations," Qube chairman Allan Davies said.

It expects the structure to allow it to be "strongly positioned to continue to expand its core logistics business, while retaining exposure to long-term growth in container volumes at MLP through terminal and logistics activities".

 

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