Australian express and logistics operator Toll Group todayreported a strong full-year performance for its Toll Global Express division, despite thechallenging economic conditions and weather-related disasters in some of its key markets.
Outgoing MD Paul Little said the division’s performance inAustralia had been excellent, with its air express unit Toll Priority and its road-based Toll IPECservices “both performing very well”. The division’s Toll Footwork Express unit in Japanexperienced a small underlying loss, “reflecting operational challenges arising from the earthquakeand tsunami”, although the reported earnings of the unit were boosted by a number of one-off gainsamounting to around A$25 million.
Sales revenues for Toll Global Express overall grew by more than19% to A$2.14 billion in the 12 months to June 2011, while earnings for the division increased byalmost 27% to A$169.9 million.
The company described its revenue performance in Australia as “very pleasing, given continued softness in certain business segments and geographical areas. TollPriority and Toll IPEC had strong performances.”
It said Toll Priority experienced strong revenue and Ebita growth,with the inclusion of revenues from DPEX and other acquisitions, improved external air charterrevenue, and new contract wins offsetting softer markets in NSW and Victoria. The acquisition ofDPEX operations in Singapore, Hong Kong and China was completed in August 2010, extending thedivision’s express freight offering in Asia. Toll said these operations had now been successfullyintegrated into the existing Toll Priority business in the region.
The joint venture with Emirates, Toll Dnata Airport Services, wasalso a positive contributor, with contract wins and increased activity from existingcustomers.
Highlights included the introduction of a fourth B737 freighteraircraft by Toll Priority in May 2011 to address capacity constraints in the overnight network andto secure additional charter business.
It said Toll IPEC experienced strong revenue and Ebita growth,with higher volumes in Western Australia and Queensland. Conditions in the New South Wales andVictoria markets had been soft, “but partially offset by customer wins, new depot efficiencies andtight cost control”.
Other significant events included the new Toll IPEC depot inPerth, WA, becoming operational in December 2010, with all existing operations in Perth fullytransferred by the end of May 2011. The Toll IPEC depot in Adelaide was also upgraded. And thesecond phase of ‘Project Unite’, a common freight management, customer relationship management andmarketing system for Toll IPEC and Toll Priority, went live in June 2011.
Elsewhere in the group, Toll Global Logistics saw revenue growthof almost 4%, to A$1.36 billion, “with excellent results from its Australian businesses in2storeand Contract Logistics, and its South/Southeast Asian region”, Little said. Reduced special projectwork from the Singapore government contracts and the sale of Pacorini Toll negatively affectedcomparisons to the prior year, while the division’s automotive logistics was particularly impactedby the difficult economic conditions in Australia. The division’s earnings declined by around 8% toA$90.5 million.
Toll Global Forwarding continued to follow its strategic growthpath, with revenue growth of 53% to A$1.63 billion, having completed a number of bolt-onacquisitions during the year. Earnings for the division grew 67% to A$33.9 million.
“Despite global market conditions remaining challenging, goodgrowth in revenue was achieved, including 5% organic growth,” Little said. “Investment to increaseour management capability to underpin future growth has negatively impacted the performance of thebusiness in the short term as it is positioning itself for its targeted scale. The roll out of newIT systems currently underway will enhance service levels and improve yield.”
