Imperial earmarks more international disposals

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Imperial earmarks more international disposals

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Published Date: 2021-02-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

Imperial earmarks more international disposals

The logistics group says its Logistics International operation is not core to its Gateway to Africa strategy.

Imperial Logistics has reported an increase in first-half revenue as lockdown restrictions started to ease and it benefitted from new business gains and acquisitions. However, earnings for the period have declined and the logistics group says business is not yet back to pre-Covid-19 levels.

Imperial is busy exiting its European operations as it focuses on its 'One Imperial' and 'Gateway to Africa' strategy. That saw it disposing of its European Shipping business for proceeds of R3.4 billion over the period and finalising the sale of its loss-making Pharmed operation. It made strategic acquisitions of R120 million for its Market Access and Logistics Africa units during the period.

The company said its Logistics International unit was also non-core to its strategy and it was exploring an appropriate exit plan for this business. The exit plan would include the remaining assets in the International portfolio being contract logistics and freight, including Palletways. However, given the current macroeconomic uncertainty and the objective of maximising value for shareholders, it said this could take time to achieve.

The company said volumes and profitability in the six months to end-December recovered strongly from the previous six months when they were impacted by the hard lockdown. It removed annualised costs of R200 million from Logistics Africa, with the full benefits likely to be realised next year. New business revenue of approximately R6.2 billion per annum was secured on a rolling 12-month basis to the end of December 2020. A material Procter and Gamble contract awarded to Imperial's joint venture with the Chanrai Summit Group for P&G's end-to-end distribution and logistics of consumer goods in Nigeria became effective on 1 January.

Revenue rose 15% to R26.4 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 2% to R2.55 billion. Operating profit fell 18% to R1.2 billion and total headline earnings per share (HEPS) came in 3% lower at 185c. Core EPS from continuing operations dropped 39% to 235c while HEPS from continuing operations declined by 43% to 180c. It declared an interim dividend of 83c per share.

While some of the Covid-19 restrictions were easing, Imperial expected the impact of the pandemic and the ensuing uncertainty to continue to affect its operations and performance in the short-term. Although volumes and operating activities were improving, it said the business was not yet at pre-Covid-19 levels.

Imperial's shares closed 3.5% down at R44.64 yesterday.





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