Imperial earnings increase in spite of revenue lost due to the pandemic
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IMPERIAL Logistics, which is being acquired by Dubai-based DP World, lifted headline earnings a share 218 percent to 334 cents in the year to June 30 even though the pandemic cost it R2.6 billion in revenue.
“While the impact of Covid-19 on operations was not as severe as in the 2020 financial year, management estimates that Covid-19 negatively impacted revenue and operating profit by R2.6bn and R346 million respectively in 2021,” the group said yesterday.
The DP World transaction, with Imperial being acquired at R66 a share, was expected to be concluded by February next year, pending the successful outcome of outstanding approvals, Imperial’s management said yesterday.
Imperial, an Africa-focused provider of integrated market access and logistics solutions to the healthcare, consumer, automotive, chemicals and other sectors, lifted revenue 13 percent to R52.2bn, while earning before interest, tax depreciation and amortisation was up 22 percent to R4.99bn. Operating profit was 60 percent higher at R2.33bn.
No final dividend was declared. “The start to the 2022 financial year has been challenging, with July and August trading negatively impacted by the social unrest in South Africa, extended Covid-19 related restrictions on the sale of alcohol in South Africa and Mozambique, the shortage of semiconductors across Europe, and higher supply chain costs negatively impacting volumes due to the unavailability of shipping containers and subsequent higher freight rates,” the group said.
During the past year, Imperial’s disposal of its European and South American shipping business was concluded for R4.7bn. The balance sheet remained strong, supported by the proceeds.
Strong free cash flow of R900m was generated (R1.3bn).
Excluding businesses held for sale, revenue grew 14 percent to R51.7bn, mainly from a recovery in volumes across most businesses as Covid-19 lockdown restrictions eased in certain key markets, new business gains and acquisitions.
However, businesses exposed to liquor and tobacco sales in Africa, and the European operations in the automotive sector, were impacted by ongoing lockdown restrictions and shortage of semi-conductors respectively.
Continuing earnings before interest, taxes, depreciation and amortisation, excluding businesses for sale, increased by 23 percent to R4.96bn. Continuing Heps increased 113 percent to 332c per share.
Excluding the impact of Covid-19 in 2020 and the 2021 financial years, management estimated that revenue increased by 9 percent and operating profit increased by 7 percent.
New business revenue of approximately R5.9bn per annum was secured to the end of June 2021.
Imperial shares closed 1.40 percent higher at R63.68 on the JSE yesterday.