Toll mulls fate of loss-making divisions dragging on company's growth
2012 05 22
- Details
WITH EBIT down 2.2 per cent and cash-flow off by 19.8 per cent, Australia's Toll Group is considering the future of its Japanese trucker Footwork and other loss-making divisions, according to the UK's Transport Intelligence.
"Continued pressure from the soft retail sector in Australia affected the financial performance of our domestic businesses with an exposure to that sector, together with weakness in the global apparel sector impacted on volumes and EBIT in Toll Global Forwarding," said Toll managing director Brian Kruger.
This, he said, has prompted the company to take "a close look at underperforming businesses and are already undertaking strategic reviews of Footwork Express, Toll Marine Logistics Asia and Toll Refrigerated."
Toll Group quarterly revenue was up 4.7 per cent at A$4.43 billion (US$4.407 billion) with EBITDA increased 5.2 per cent at A$380 million (US$377 million).
Toll's forwarding division, results were affected Footwork's problems which experienced a revenue decline of two per cent. Without Footwork numbers, the division would have made 5.7 per cent more revenue and 3.8 per cent more EBITDA.
Reporting a "swing from air freight to ocean freight in the retail sector during calendar 2012", Toll said its first quarter ocean freight volume came in at 248,000 TEU while air freight stood at 66,000 tonnes.
This shift from air to sea was common to all markets, with importers in all regions minimising high-cost air cargo services, said the report.
Toll Global Logistics revenue was up 4.8 per cent and EBITDA increased 11.8 per cent. Here, contract logistics in Asian markets generally prospered, with chemical, FMCG, and automotive logistics growing in markets such as Singapore and Malaysia. But the China business was hit by rising costs of labour and fuel.
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