Australian transport and logistics group Toll Holdings announced today it is profiting from itsexpansion 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, announcednet profits up 10.7% to A$237 million (EUR 147.8 million) for the half-year ending December 31,2007. Underlying operating profit (EBIT) rose 13% to A$431 million on revenues up 8.3% to A$4.1billion.
Managing director Paul Little said: “We have continued to grow revenues and earningsorganically, as well as make significant acquisitions and integrate new businesses.” Majoracquisitions include the recently-completed takeover of Hong Kong-based freight forwarder Baltrans.
Toll Australia, covering all Australia-based businesses, improved its EBIT by 18% to A$184million on revenue up 7.3% to A$2.3 billion. The company said it benefited from higher volumesgenerated by the resources sector and buoyant retail sector demand, as well as new facilities andupgraded fleet and technology.
Although Toll does not release figures for its express businesses Toll IPEC, Toll Priorityand Toll Fast, it said that “the time sensitive operations of Toll IPEC and Toll Priority continuedto drive improved results”, despite Toll Priority’s one-off costs for the creation of an airlinehaul 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 andPerth, while the ATRs fly between Brisbane, Sydney, Melbourne and Adelaide. It also sealed along-term agreement with Virgin Blue for exclusive access to bellyhold capacity on the passengerairline’s domestic and international flights.
“The long term freight operations agreement with Virgin Blue together with the dedicated airfreighters and the regional air freight network, has provided Toll with a comprehensive nationalnetwork capable of servicing increasingly complex needs of customers,” the group said.
Toll also announced today that it has acquired regional company Victorian Express and SkyNetInternational’s air express operations in Australia and New Zealand. “This international airexpress operation will provide additional scale and growth opportunities to the Toll PriorityGlobal Service particularly within the Asian Region,” it stated.
In relation to Virgin Blue, Toll has already indicated it will reduce its 63% stake in thelow-cost airline, which is planning to launch flights to the USA in late 2008. Little said astrategic review was expected to be completed in the next few weeks and the airline’s board isconsidering several “expressions of interest”.
Looking ahead for the rest of the year, Little said that despite uncertainty over the globaleconomy, Toll did not expect a significant downturn in its major markets and the outlook remainedpositive. International tradeflows continued to grow strongly and the momentum was not expected toslow significantly. Supply chain management, particularly regarding Asia, remained high on customeragendas.
