2 Mar 2020

TIL makes a loss with a market slowdown and tighter margins

1:31 pm on 2 March 2020

TIL Logistics has made a loss following a difficult trading period leading into Christmas, with increased costs and margins under pressure.

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Photo: Supplied / NZX

The New Plymouth-based company, which specialised in transporting heavy machinery and fuel, reported a net loss of $2.4 million in the six months to December, which compared with a gain of $3.8m the year earlier.

The loss also included a $2.6m tax adjustment.

Revenue was down slightly at $174.6m, but the underlying profit of $8.7m was at the top end of its guidance range.

The company revised down its outlook in mid-January, as a result of softer trading conditions and the loss of a significant customer.

Finance costs also went through the roof after it spent nearly $9m to buy some trucks and trailers.

However, it said it had since renegotiated its funding arrangements to strengthen its balance sheet.

"The 1H20 result was disappointing and while we are seeing growth in several divisions, management has also identified a number of areas for operational improvement," chair Trevor Janes said.

"A turnaround plan is in place and we expect to see the initial benefits from this start to flow through in the second half."

The company said it was expecting an improved second half, but warned it was already feeling the affect of the Chinese New Year and Covid-19 coronavirus on imports.

It said it was also affected by the slowdown of log exports.

Not withstanding any material affect from the virus, the company was forecasting a full year underlying profit of between $23m and $24m.

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