Costs, customers and delays take edge off restructuring bulk haulage firm's solid revenues performance
August 27, 2012
Despite what is likely to have been a frustrating past financial year, Scott Corporation is looking to spread $30 million in capital expenditure around in the next 12 months.
But the company is yet to decide if it will go to the market for extra funds.
“This is linked to the assumption that our equipment servicing the Sydney waste, the Illawarra coal haulage and Newcastle alumina transport contract require replacement and that those contracts will be renewed,” Managing Director David Keane says.
“This budgeted capital expenditure includes our planned maintenance capital and an allowance for additional growth capital.
‘While no final decision has been made with respect to the funding mix, the group currently has sufficient approve debt facilities to cover this program if required.”
Higher volumes and an acquisition have propelled bulk transporter Scott Corporation’s revenues 7.3 percent upwards last financial year to $171 million but profits remained static at $3.36 million, up 0.77 percent.
The highlights related to subsidiary Southern Bulkhaulage starting a new off-road Hunter Valley contract, Chemtrans trucking more bulk liquids in Townsville and the purchase of Allfreight in March.
These were shaded by higher repair and maintenance costs, particularly in a Southern Bulkhaulage fleet due for replacement in December, Managing Director David Keane says.
The firm also faced Bluescope ceasing to road transport of scrap metal which had been worth $25,000-$30,000 a month to Bulktrans’s warehousing and distribution delivery, Port Kembla coal industrial action and heavy rainfall disruption in Queensland.
A slower-than-expected approvals process for staff of Allfreight, now called Hi Explosive and part of Chemtrans, hindered full exploitation of the business.
That and a deferral of some vessel unloading projects meant the division was 25 percent down on potential.
Chemtrans in Victoria fell victim to the downturn in that state while acid volumes in Darwin were also down when a mine flooded.
Meanwhile, the company underwent a restructure in July, with Chief Financial Officer Karl Cope looking after business developing and growth, finance and administration, business improvement and IT.
General Manager Operations Paul Dale will take charge of customer service, people management, equipment and related supplies, maintenance and operational excellence, while General Manager Corporate Support Tom Hearne oversees human
For the future, Scott is looking to the new five-year SITA Australia waste-haulage contract, for which it will spend $3.6 million on new plant and equipment
And, despite the loss of a contract in New South Wales, is expecting the dangerous goods market to pick up in that state.
