Toll announces 4% decline in net profits for the half year
Toll Group has released its results for the six months ended 31 December 2011, with net profit after tax of A$158m, down 4% compared to the corresponding period of 2010. However, sales revenues of A$4.4bn, was up 5% compared to the corresponding period of 2010. Total operating profit (EBIT) was A$248m, down 2%.
Commenting on divisional performances, Brian Kruger, Managing Director of Toll Group said, "Toll Global Resources has continued to see strong organic growth, within both the ongoing Gorgon project and also with our growing involvement in Queensland liquefied natural gas (LNG) projects. The Singapore Toll Offshore Petroleum Services (TOPS) supply base project has also progressed well and is due for completion in the first quarter of 2013. Our acquisition of Mitchell Corp (rebranded as Toll Mining Services, Western Australia) has performed very well and has already enhanced our opportunities for further growth in that region.
"Toll Global Logistics saw growth in almost all businesses with the strongest performance from its Customised Solutions Services (formerly known as in2store and Toll Chemicals) reflecting increased volumes from both new and existing customers, while Automotive Logistics Services saw some improvement from both new Australian domestic models and increased import activities. The growth markets of China and India also showed gains as we continue to build our positions in those countries.
"Toll Global Forwarding found the macro conditions particularly challenging given its current stage of development. Our current over-reliance on fashion apparel during what has been a very weak period for that sector can clearly be seen in this result. Moving towards a more balanced market sector exposure and achieving scale remains critical for achieving our return targets for this business.
"The Australian businesses of Toll Global Express have continued to perform well, while underlying earnings at Footwork Express in Japan were adversely affected by a very weak market environment.
"Revenue for Toll Domestic Forwarding was ahead of the prior corresponding period despite continuing weak underlying economic conditions. However, aggressive competition and lingering weather effects in Queensland led to margin pressure in some businesses.
"Toll Specialised and Domestic Freight performed well due to a combination of strong volumes to the resources sector and the implementation of cost improvement and yield management initiatives. In addition, the Toll Liquids business saw the benefit of new contract wins.In conclusion, Kruger said, "While the volatility we are all seeing in the macro environment makes it very difficult to have a firm view on the outlook for the remainder of the year, we are confident that Toll is following a strategic path that will provide superior, sustainable returns for our shareholders over the longer term."