Cargo Carriers profit plunges after losses at three of four units
Profit plunged at transport specialist Cargo Carriers in the year to February, with three of its four operating divisions running at losses.
Cargo, which has Bidvest subsidiary BB Investments as a 14.3% shareholder, reported profit from continuing operations dropping from R41m to just R4m. Operating margins were smashed from 7% to 0.69%.
CEO Murray Bolton said the past financial year was one of the more economically challenging for the business.
He reported that difficult operating conditions in the mining, steel, sugar and cement sectors caused extreme pressure on margins as customers actively sought rate reductions — often with lower utilisation.
"This situation was exacerbated by the fragmented and highly competitive landscape, with low barriers to entry."
A segmental report showed the fuel and powders segment posting an operating loss of R2.65m off revenue of R234m, the agriculture segment showing a loss of R7m from revenue of R25m and the supply chain operations showing a loss of R7.6m of turnover of R20m.
Only the chemicals and steel division traded in the black with profit of R19m eked from revenue of R303m.
Profit for the year came in at R22m — but this figure was buoyed by the completion of the sale of Cargo’s Zambian subsidiary during the year and a revaluation of properties. The final dividend was reduced to 4c per share from 20c per share previously.
Looking ahead, Bolton said Cargo expected subdued volume growth in the new financial year, given the growth outlook in the regional economy.
"Our focus this year will be on efficiencies, maintaining a strong balance sheet, and striving for a low-cost base."
Cargo reiterated an earlier announcement that Bolton would step down as CEO in the next 12-month period.
The company said the board had started the process of identifying a successor to Bolton.
The Bolton family — via Cargo Carriers Holdings — controls the firm with a 64.3% stake.