TIL Logistics issues profit warning amid rising fuel costs, bad weather
By Margreet Dietz
July 9 (BusinessDesk) - TIL Logistics Group, the trucking and logistics company that went public with a reverse listing on the NZX last December, warned full-year earnings will fall short of expectations because of rising fuel costs as well as road closures due to bad weather and big storms.
For the year ended June 30, 2018, TIL expects to deliver sales "in line with the strong first half but with lower earnings," the New Plymouth-based company said in a statement. "The full year result is expected to be below PFI (prospective financial information), due to some headwinds and a few unanticipated operational factors not included in the PFI forecasts."
In February, the company reported a loss of $15.7 million for the six months ended Dec. 31, from a profit of $2 million a year earlier. It then forecast a statutory loss of $10.3 million for full-year 2018.
"In particular, along with the rest of the transport industry, the company is being impacted by rising fuel costs and the associated delay in adjusting for this in customer pricing," the company said. "The bad weather and big storms have also been problematic, closing transport routes and impacting on the transport needs of large customers.”
While the acquisition of "a number of new customer contracts" after the expansion of the company's logistics unit "will provide strong cash flows and profitability over the long term, the short term costs required to set up resourcing for these have had some impact on results compared to PFI," the company said.
TIL also said its Pacific Fuel Haul specialist road tanker division renewed a supply contract with fuel retailer Z Energy under long-term and exclusive terms that will boost volumes and distribution coverage.
"The renewed contract covers the North and South Islands and includes cartage of petroleum and aviation fuel for both of Z Energy’s brands, Z and Caltex," TIL said.
On Friday TIL shares jumped 4.9 percent to close at $1.70.