Toll profits from Asian expansion
Australian transport and logistics group Toll Holdings announced today it is profiting from its expansion into Asia and good domestic demand. The group has made two express acquisitions in Australia but could soon sell its majority stake in the Virgin Blue airline.
The listed company, whose businesses include leading Australian express operators, announced net profits up 10.7pct to AUD 237 million (EUR 147.8 million) for the half-year ending December 31, 2007. Underlying operating profit (EBIT) rose 13pct to AUD431 million on revenues up 8.3pct to AUD 4.1 billion.
Managing director Paul Little said: “We have continued to grow revenues and earnings organically, as well as make significant acquisitions and integrate new businesses.” Major acquisitions include the recently-completed takeover of Hong Kong-based freight forwarder Baltrans.
Toll Australia, covering all Australia-based businesses, improved its EBIT by 18pct to AUD 184 million on revenue up 7.3pct to AU D2.3 billion. The company said it benefited from higher volumes generated by the resources sector and buoyant retail sector demand, as well as new facilities and upgraded fleet and technology.
Although Toll does not release figures for its express businesses Toll IPEC, Toll Priority and Toll Fast, it said that “the time sensitive operations of Toll IPEC and Toll Priority continued to drive improved results”, despite Toll Priority’s one-off costs for the creation of an air linehaul network.
In July, Toll Priority launched a dedicated cargo fleet of three B737s and two ATRs, supported by 50 chartered aircraft. The B737s operate between Brisbane, Sydney, Melbourne and Perth, while the ATRs fly between Brisbane, Sydney, Melbourne and Adelaide. It also sealed a long-term agreement with Virgin Blue for exclusive access to bellyhold capacity on the passenger airline’s domestic and international flights.
“The long term freight operations agreement with Virgin Blue together with the dedicated air freighters and the regional air freight network, has provided Toll with a comprehensive national network capable of servicing increasingly complex needs of customers,” the group said.
Toll also announced today that it has acquired regional company Victorian Express and SkyNet International’s air express operations in Australia and New Zealand. “This international air express operation will provide additional scale and growth opportunities to the Toll Priority Global Service particularly within the Asian Region,” it stated.
In relation to Virgin Blue, Toll has already indicated it will reduce its 63pct stake in the low-cost airline, which is planning to launch flights to the USA in late 2008. Little said a strategic review was expected to be completed in the next few weeks and the airline’s board is considering several “expressions of interest”.
Looking ahead for the rest of the year, Little said that despite uncertainty over the global economy, Toll did not expect a significant downturn in its major markets and the outlook remained positive. International tradeflows continued to grow strongly and the momentum was not expected to slow significantly. Supply chain management, particularly regarding Asia, remained high on customer agendas.
1 USD = 1.06624 AUD
