Qube chairman Chris Corrigan is bracing for a tough financial year, but remains confident a $9bn takeover of competitor Asciano would be a lucrative move for shareholders.
Corrigan, who has led the charge for Qube to steal Asciano from under the nose of Bermuda-Canada-based fund Brookfield, told shareholders this week at Qube’s annual general meeting that times would be tough in the next financial year.
“Qube expects trading and economic conditions to remain difficult in FY 16,” Corrigan said in his AGM address.
While Qube will benefit from the full-year contribution of its Quattro and Moorebank projects, Corrigan said he expects underlying earnings from its major ports and bulk division would be down year-on-year.
“This is a result of the conclusion of three significant contracts and the revised terms of the Atlas contract that occurred in the second half of FY 15,” he explained.
Qube agreed to a reduced-margin deal with Pilbara iron ore miner Atlas during the 2014/15 financial year, as the miner needed a cheaper deal if it was to keep its head above water.
The negative view for Qube would be made near-irrelevant, however, if the company could win in the ongoing bidding competition for port and rail owner Asciano.
“Obviously the outcome of the Asciano proposal is uncertain but should we be successful in acquiring the container port assets, we would expect the transaction would be highly accretive to Qube shareholders in the medium term,” Corrigan said.
“Key priorities for the Company in FY 16 will be financial close on the Moorebank arrangements, commencement of construction and progress with discussions with target tenants for the warehousing,” he explained.
“In parallel with this, Qube will progress its assessment of the optimal ownership and funding options for the warehousing to be developed at Moorebank.”