The Qube Holdings Ltd (ASX : QUB) share price has fallen lower by 2.3% today, following the release of its results for the half year ended 31 December 2019.
Qube is an integrated provider of import and export logistics services. The company is comprised of 5 business units: ports, bulk, logistics, infrastructure and property, and strategic assets.
What did Qube report?
Qube reported overall revenue of $957.3, which was a 14.4% increase on the prior corresponding period (pcp).
However, the company reported net profit after tax (NPAT) of $51.7 million, which was 15.9% lower than the pcp. The company noted that the lower NPAT result was mainly due to the impact of the new lease accounting standard (AASB 16), which applied to Qube from 1 July 2019. This new standard reduced the company's statutory after-tax earnings in the period by around $10.3 million.
Key achievements and activities
Qube reported major contracts signed with Shell Australia and Bluescope Steel, which will help to position the company for strong medium-term growth.
The new Target Australia warehouse being built by Qube was successfully completed, and its Import/Export (IMEX) terminal and rail operations were reported to have commenced at Moorebank Logistics Park (MLP).
Qube also reported that commercial and legal negotiations are currently progressing with a potential major tenant for a significant part of Moorebank Precinct West (MPW). At this point in time, binding agreements are being finalised. Qube is hopeful that the go-ahead for this new project will occur in the near future.
Commenting on the interim result, Qube Managing Director Maurice James said:
There has been a steady performance across the Qube group demonstrating again the resilience of our earnings base across our chosen markets. Qube was able to deliver earnings growth despite challenges in some parts of the business including declining motor vehicle and container volumes and the continued effect of the drought.
Outlook and FY20 guidance
Qube commented in its release today that it expects some weakness in its second half underlying earnings as a result of a number of factors including: the recent bushfires, adverse weather events across the country in early 2020, as well as the coronavirus.
However, the company feels that it is still well placed to continue to deliver sustainable, long-term earnings growth.
