JSE-listed niche logistics provider OneLogix Group produced a “satisfactory set of results”  for the financial year ended May 31, despite it being a particularly difficult year, CEO Ian Lourens says.

“Notwithstanding South Africa’s emergence from the restrictions of the protracted Covid-19 lockdowns, local and regional economies remained comparatively listless. Within this sluggish economic environment, it has become increasingly costly to run a logistics business in South and Southern Africa, primarily because we are simply not able to recover various rising costs from our value chain,” he explains.

Lourens adds that the challenging trading environment had been exacerbated by the reduced economic activity during and after the civil unrest in KwaZulu-Natal in July 2021. This was later compounded by the cyberattack on Transnet’s operations, which further curtailed the flow of goods into and out of South Africa.

“The persistent violent protests on the country’s national road network also continued to present a serious challenge, while the extensive infrastructural damage caused by the floods in KwaZulu-Natal earlier this year aggravated an already strained trading scenario.”

Despite these considerable headwinds, some of the group’s businesses had performed above expectations.

“On balance, each of the businesses remain well-positioned in their respective markets with resilient and innovative management teams, which together with a strong customer base, will ensure sustainability,” Lourens says.

He posits that the group’s financial position and the resources available to it have successfully reinforced a solid platform to enable OneLogix to navigate the prevailing uncertain trading environment.

“This will also allow the group to take advantage of any growth opportunities should they arise.”

FINANCIAL REVIEW

Revenue increased by 24% year-on-year to R3.07-billion for the financial year under review. Revenue increases were experienced across all operations and returned to similar or better levels than before the pandemic.

Cross-border transport volumes recovered strongly in the year, increasing by 35% from the prior year to R615.3-million. An increase in the average fuel price for the year of 32% resulted in an increased fuel-spend recovery in the top line of around R190-million.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 12% from R366.1-million to R411.3-million.

Lourens says this was encouraging considering the significant cost control measures and one-off staff cost savings implemented during the prior year, as well as the major impact on trading volumes owing to the civil insurrection and flooding experienced during the year.

Ebitda margins remained resilient at 14.3%, compared with 14.9% in the prior year, excluding the additional fuel cost recovered in revenue of R190-million from both revenue and operating costs to enable a more meaningful comparison.

Trading profit was up 30% year-on-year to R178.7-million, notwithstanding an increased depreciation and amortisation charge owing to the Umlaas Road Phase 3 coming into operation at the beginning of the second half of the prior year.

Consequently, trading margins increased from 5.6% to 6.2% after excluding the R190-million additional fuel charge from both revenue and operating costs.

The share repurchases effected in the second half of the prior year resulted in a weighted average of 223.9-million shares in issue for the year, 1% less than in the prior year.

The combined effects of several challenges and an increase in non-controlling interest share of profits by 80% from R14.2-million to R25.5-million have contributed to earnings per share (EPS) decreasing by 72%, or 9c, to 3.5c.

Headline earnings per share (HEPS) of 3.4c were 69% lower, while core HEPS decreased by 60% to 5.4c.

Cash generated from operations before net working capital inflows, net finance costs, taxation, and dividends remained strong, increasing by 8% to R386.1-million. The net working capital inflows of R161.8-million were principally owed to the continued development of the clearing and forwarding offering within the group.

OneLogix continues to be diligent, investing a total of R159.9-million in owned operational infrastructure during the year.

Assets, mainly trucks, with a carrying value of R34.4-million were disposed of for proceeds of R43.7-million owing to the buoyant second-hand market for commercial vehicles on the back of supply constraints for new vehicles.

Given the prevailing uncertain economic circumstances, no dividend was declared for the period.

OUTLOOK

Lourens says the group’s strategy remains unchanged.

“Especially during these trying economic times, we will continue to focus on extracting maximum efficiencies from existing businesses in order to protect and grow their individual market shares in their respective markets.”

He adds that the executive management team maintains full confidence in the group’s experienced, stable management teams with their proven skills and fully expects them to continue guiding the businesses through the prevailing tough market conditions.

“We will also continue to look for new opportunities, which will include not only organic growth but also acquisitions and further start-up activity, all of which will be continually assessed to maximise growth for the group.”