Grain, containers drive Qube HY23 profit increase

Grain Central, February 24, 2023

Narrabri Intermodal Terminal

AUSTRALIA’S largest logistics provider, Qube, has announced a 41 percent increase in profit and a 31pc rise in underlying earnings for the half year ending December 31.

The company has credited this result to continuing high volumes across most of its core markets, including containers, grain and other agriculture products.

Qube’s ports and bulk operations reported HY23 revenues of $806.4M, up 18pc on the previous period.

However, this result did not flow through into EBITDA, which fell 8.5pc to $64.6M, due to labour shortages, port congestion and the inability to recover some inflationary and supply chain-driven cost increases.

Qube’s logistics and infrastructure segment saw EBITDA up 69.5pc to $118.5M and revenue up 32.2pc to $692M.

Agriculture, dominated by grain haulage, contributed $133.4M of this revenue, up 13.4pc on HY22.

Qube also benefited from an increase in performance from its 50pc interest in container-terminal operator, Patrick, which added $32.2M to the company’s net profit after tax, an increase of 37pc on HY22.

Paul Digney

Qube managing director, Paul Digney, said the diversification of the business helped it weather economy-wide issues experienced during the half.

“We have delivered a very strong financial performance for the period, and this is despite ongoing skilled labour shortages, the continuing high inflationary environment and some ongoing supply-chain disruptions,” Mr Digney said.

“With continuing high volumes across most of our core markets, and multiple drivers of growth which we expect to continue, we have built good momentum going into the second half and expect to deliver a strong financial performance for the year.”

Mr Digney said the logistics and infrastructure unit provided the most gains, with grain a key component of this business.

He said this was driven by a growth in rail activities in New South Wales due to an increase in grain haulage, the BlueScope steel contract and higher volumes in container transport, handling and storage activities.

A rise in export volumes loaded from Qube’s NAT (Newcastle) and Quattro (Port Kembla) grain terminals also had a positive impact on the result.

Qube chief financial officer Mark Wratten said the company invested $211M in gross capital expenditure during HY23.

He said half of this amount went to maintenance and replacement equipment and was $64M spent on new items, such as grain wagons, mobile transport equipment, warehouses and storage sheds.

Intermodal terminals progress

During the half Qube made significant progress with the Moorebank Logistics Park and adjacent import- export terminal (IMEX) and interstate terminal.

The MLP connects Port Botany with rail terminals and warehousing in southern Sydney.

Mr Digney said the company is “continuing to progress” the IMEX terminal.

“We are currently operating the IMEX under phase one of the automated IMEX terminal roll out, which is the operational testing phase.

“The IMEX handled approximately 54,000 TEU in the period, with some volumes being diverted to Qube’s other IMEX terminals in Sydney while the automation rolled out and refined.

“This testing phase is now scheduled to be complete by September in this calendar year.”

He said construction is continuing on the interstate terminal with some delays experienced last year due to weather conditions.

“We are currently on schedule to complete stage 1A of construction and be operational by late October or early November this year, ahead of time.

“With both these terminals we expect to see plenty of interest once they are fully up and running.”

 Patricks capital works

Mr Digney said Patrick Terminals will also complete a number of construction and automation projects this calendar year.

At Port Botany, phase two of the rail terminal works are on track to be finished by September and an automated truck handling project should be rolled out by the middle of this year.

A crane automation pilot project in Fisherman Islands is in the final stages and expected to be fully implemented by March.

Both the East Swanson rail facility, located in Melbourne, and the Fremantle redevelopment project are on track to be delivered by mid-2023.

“All these projects in Patricks, when completed, will provide future productivity and customer user benefits.”

Acquisitions in pipeline

Qube made no business acquisitions in the half.

However, Mr Digney said the company has several in the pipeline which could be progressed this financial year.

“Our growth was achieved without any new acquisitions in the period.

“We are well progressed on a number of bolt-on acquisitions at present they could complete in H2.

“However, there is no certainty of anything completing in the period.

“I think what we have on the table are businesses that fit Qube well, provide probably some more infrastructure or businesses that complement some of our operating units with synergy value.”



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