Transport and logistics company, K&S Corporation, has announced its full year results for 2021.
Statutory profit before tax was $27.5 million for the year ended 30 June 2021. The result is 72.8 per cent higher than the prior corresponding period.
Statutory profit after tax was $18.1 million, 62.9 per cent higher than the previous year statutory profit after tax of $11.1 million.
Included in the group’s statutory result for FY2021 was $16.2 million (before tax) attributable to the JobKeeper subsidy, which was received in the September 2020 quarter. The group’s statutory result also included $6.0 million of one-off costs treated as significant items. These largely relate to the impairment of the carrying value of buildings and land totalling $4.7 million and $0.9 million in miscellaneous restructuring costs mainly associated with the exiting of the Hyde Park Tank business.
After adjusting for the above significant items including government wage subsidies, the current year underlying profit before tax was $17.1 million, an increase of 44.4 per cent to the prior corresponding period. The underlying profit after tax was $11.9 million, an increase of $3.7 million to the prior corresponding period.
Operating revenues decreased by 12.9 per cent to $688.5 million.
Operating cash flow was $75.5 million, 9.2 per cent lower than for the previous year. Operating cash flow included benefits derived through continued and improved working capital management and JobKeeper subsidies.
Safety remains a key focus for the group – lost time injury rate reduced from 6.6 at the end FY2020 to 4.9.
“Managing Covid-19 required considerable resourcing,” K&S said in an ASX announcement.
“Our key priority was, and remains, the safety and welfare of
our employees and their families. Cognisant of the Group’s large and mobile workforce, which provides services to a substantial number of customer sites, it is pleasing that to date the group has had nil employee Covid-19 cases.
“Our employees’ proactive engagement and support underpinning this outcome has been excellent. Following strong FY2020 improvements, the Australian transport segment continued to realise further consolidation improvements to the majority of its operating divisions. The reduction of $1.1 million in depreciation expenses as a result of the change to the Group’s depreciation policy more than offset the reduced contribution by our aviation refuelling business, Aero Refuellers. Full year revenue declined due to a combination of the cessation of contracts, exiting of underperforming business units and Covid-19 related reduced customer activity.
“The New Zealand business produced a strong result, with the domestic economy proving to be resilient throughout the year. It continues to realise growth through the provision of its integrated and value adding service offering, with several key customer contracts extended or renewed in the course of the year.
“The fuel trading business has again provided sound financial results, despite reduced demand for fuel in FY2021 consequent to COVID-19. The fuel retailing and wholesaling markets remain dynamic and continue to exhibit high
levels of competition. An expansion of our network and the completion of several key projects to enhance our retail offering are currently being progressed.
“The implementation of cost reduction strategies continued across the business, contributing strongly to improved underlying profit. In particular, the Group has maintained its focus on operational efficiencies, supplier renegotiations, cessation of underperforming activities, and the rationalisation and replacement of specific fleet assets that reduced operating costs. Ongoing cost reductions are expected to continue to be accretive in FY2022, although these may be offset by possible Covid-19 related impacts.”
Improved trading performance, JobKeeper subsidies and increased property valuations have contributed to a strengthened balance sheet for K&S in FY2021.
The group’s debt profile carries long maturities and the gearing ratio (excluding lease liabilities) reduced to 9.0 per cent at 30 June 2021, compared to 22.5 per cent in the prior year. Net debt reduced to $26.6 million, the lowest since 2003.
During the course of the year, the group acquired fixed assets totalling $35.1 million, compared to $20.6 million in the prior year, continuing the investment in a modern operating fleet.
Based upon independent valuations, the group increased the carrying value of its freehold property portfolio by $27.6 million. This portfolio includes industrial assets not adversely impacted by Covid-19.