K&S Corporation has announced an underlying profit before tax of $42.1 million for the year ended 30 June 2024.
It represents a decrease of 3.6 per cent on the prior corresponding period.
The underlying profit after tax was $31.7 million, 3.4 per cent up on the prior corresponding period result of $30.7 million.
Operating revenues, according to the company, decreased by 2.9 per cent to $824.6 million in FY2024.
Operating cash flow for FY2024 was $65.8 million, 35.2 per cent lower than for the previous year.
The Australian transport segment of K&S Corporation of which K&S Freighters is a mainstay, has provided another strong financial performance in FY2024.
Full year revenue for the Australian transport segment, however, decreased from FY2023 to FY2024, in part as a result of exiting several customer contracts, lower customer volumes and a reduction in fuel prices.
Safety remains a key focus for K&S.
Its lost time injury rate reduced from 5.4 in FY2023 to 3.0 in FY2024.
In FY2024, K&S Corporation undertook its second People at Work (PAW) employee survey to assess key psychosocial hazards and factors that may have potential impacts upon employee mental health and wellbeing, job burnout, productivity, increased sickness related absence and physical disorders.
“Pleasingly more than half of the Group’s employees participated in the PAW survey, providing a strong response rate to underpin the integrity of the survey results,” said K&S in a statement.
“The Group is committed to addressing any psychosocial hazards and factors within the workplace and is reviewing a number of new initiatives to be rolled out in the course of FY2025.
“Following a stringent review process by the Safety Rehabilitation and Compensation Committee, the Group’s selfinsurance licence for workers compensation claims under the Commonwealth Comcare scheme was recently extended for a further four years through to 30 June 2028.
“This is an outstanding result and the licence extension was only granted after the Group’s safety management system was subject to external audit by Comcare as part of the renewal process.”
For the reporting period, K&S said it had been impacted by supply chain interruptions, with the timeframes for delivery of new fleet substantially delayed for much of the year.
“The Group works closely with its equipment suppliers for the procurement of new fleet assets and has been diligent to invest in fleet renewal on an ongoing basis for a prolonged prior period,” K&S said.
“The ongoing benefits from the implementation of cost reduction strategies across the business continued to contribute to 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.”
Meanwhile the Group will continue to explore opportunities to diversify the industry sectors that it services.
“Our strategy remains to improve the quality and contribution of our revenue base, rather than targeting work solely to grow top line revenue,” the company said.
The Group’s net debt increased to $23.8 million at 30 June 2024, up from ($0.4) million in the prior comparative period.
The increase in debt levels was predominantly attributable to the acquisition of industrial properties in Townsville and Adelaide for a combined purchase price of $20.3 million (excluding GST) in the first quarter of FY2024.
K&S Corporation said it was progressing plans to develop both of these sites into transport terminals within the next year.
Construction of the new Adelaide transport terminal will facilitate the exit of two existing property leases, and help the business realise operational synergies.
K&S acquired fixed assets totalling $70.4 million, compared to $68.7 million in the prior year and indicated it would continue to invest in maintaining a modern operating fleet.
K&S has a substantial property portfolio consisting of high-quality industrial assets with a carrying value of $284.1 million.
“The Group continues to invest in our safety management system and on road compliance and the training of our employees,” said K&S.
“The Group recognises that its social licence to operate is contingent upon achieving industry leading onroad behaviours and safety outcomes.”
The cessation of several customer contracts in the first half of FY2025, coupled with the full year impact of customer contract losses in FY2024, will also place downside pressure on results.
K&S anticipates that these impacts will be, at least partially, offset by price, volume and margin improvements in FY2025.
“The Group has low gearing levels and a strong balance sheet. We will continue to take a composed approach to financial risk as well as maintaining a strong focus on working capital management and underlying profit improvement,” said the company.
“We will continue to target the ongoing improvement of the quality of our revenue base, with our focus also maintained on growth in specific market segments, be that organic or through acquisition, as well as continuing to invest in our property portfolio, in each case where we can realise accretive returns on investment.”
