Freight Rail

Despite profit slump, Qube heralds “transformational” FY16

Qube container. Photo: Qube

An 18% decline in underlying net profit in FY16 was not enough to dampen the spirits of Qube managing director Maurice James, who labelled the 12-month stretch one of “transformational achievement” for the ASX-listed player.

Qube during the last financial year spearheaded the break-up and takeover of giant rival Asciano – and acquired its Patrick container terminal business in the process.

On top of that, Qube acquired 100% of the Moorebank Intermodal project after it bought its partner, Aurizon’s 33% interest for just under $99 million.

The company is also in the process of acquiring the 50% of Australian Amalgamated Terminals it doesn’t already own, subject to ACCC approval.

All that action offered shareholders a welcome distraction from the downward-trending figures in FY16.

Qube’s underlying revenue and EBITDA both fell by roughly 8%, to $1.3 billion and $246 million respectively.

EBITDA was actually up in Qube’s logistics division, by around 6.7%, despite revenue falling 3.5%. Both figures were down in Qube’s ports and bulk division, with revenue down 13.9% and EBITDA dropping 26.7%.

Qube’s underlying net profit after tax fell 18% to $87 million.

But James said that with the major acquisitions made, and given a tough market, the year was a success.

“The agreed acquisitions … were key milestones in achieving our vision for the company,” he said.

“I am particularly pleased that these milestones were achieved while the two operating divisions were still able to deliver a reasonable financial performance in the face of challenging trading conditions.”

James outlined a positive outlook for FY17, with earnings growth expected in both of its divisions.

Qube expects to get its first lease revenue from Moorebank in FY17, with a progressive ramp up of new income streams expected, along with increased costs to support the project’s development.

As part of its annual presentation, Qube also announced the team which will lead the new-look Patrick business.

James will join former Patrick managing director and current Qube chairman Chris Corrigan, along with Qube’s COO Paul Digney, as Qube’s three nominees for the new Patrick board.

Brookfield, which has three nominees of its own, will appoint Jeff Kendrew, Stewart Upson and Ray Neill to its seats.

Patrick’s chief executive officer will be Michael Jovicic, Qube’s former commercial director, who has more than 20 years of experience in the ports and logistics sector.