Faltering US pallet market dragged down profits at Australian logistics giant Brambles
By Michael House | November 19, 2009
The faltering United States economy has dragged down profits at Australian logistics giant Brambles.
The parent company of pallets supplier CHEP reported a 3 percent drop in group sales revenue to US$1.4 billion at today’s annual general meeting in Melbourne.
Chairman Graham Kraehe blamed the company’s US pallet business, calling revenue “below expectations” for the first four months of the 2009-10 financial year.
The company is yet to see any “widespread pick-up”, Kraehe told investors, but maintains confidence the company will continue to grow.
That’s despite trading in the first four months of the new financial year being “similar” to last, he says.
“Both CHEP and Recall are strong businesses with outstanding market positions, operating models and people,” he told the meeting.
“We retain a strong balance sheet, a high degree of financial flexibility and high rates of cash generation to fund investments in quality and growth
“In addition, we have other long-term growth opportunities, such as our entry into new regions and market segments.”
Tom Gorman, the former boss of Bramble’s European pallet business, was last month announced as the company’s new CEO replacing the embattled Mike Ihlein.
Gorman took his first opportunity to addressshareholders by outlining plans to improve quality and customer satisfaction, deliver profitable growth, drive cost competitiveness, focus on employees and corporate responsibility.
He believes Brambles will continue to maintain itself as one of the largest pallet producers on the planet.
“I believe strongly in our businesses. We have outstanding market positions, financial strength and growth potential,” he says.
“Although short-term trading conditions remain somewhat subdued in our largest markets, we are very well-placed to benefit from global economic recovery when it occurs.”