Toll Group sinks into the red on rising costs under shadow of Kaikoura quake
Toll Group NZ sank into the red on a rising cost line, joining other transport and logistics firms facing the squeeze when last year's Kaikoura earthquake disrupted supply routes.
The freight forwarding company, whose parent Toll Holdings in Australia was bought by Japan Post for A$6.5 billion last year, reported a net loss of $14.2 million in the year to March 31 versus a net profit of $5.9 million in the nine months to March 31, 2016, according to the annual accounts filed with the Companies Office. The local Toll company changed its balance date last year after the Japan Post takeover.
Revenue was $385.5 million in the 12 months versus $278.3 million in the prior nine month period. However, direct transport and logistics costs were $229.7 million, or an average monthly cost of $19.1 million, versus $168 million, or $18.7 million a month. Employee benefit expenses of $75.8 million compared to $54.5 million in the year earlier period. These and other higher costs mean the result from operating activities was a loss of $12.4 million in the 12 month period versus a profit of $7.4 million in the prior nine months.
Toll's accounts don't provide details on what drove the increased transport and logistics expense, but echoes the experience of locally owned rivals such as NZX-listed Mainfreight and Fliway which pointed to the closure of the South Island's main rail trunk and State Highway 1 caused by the November quake in Kaikoura as pushing up costs.
Toll's local accounts show bought land in Auckland for $58.1 million on June 16 of this year from Fletcher Building subsidiary Fletcher Steel and ex-Fletcher unit Pacific Steel. It plans to build a new freight forward facility with access to KiwiRail's rail network.
Toll operates the TranzLink trucking and freight logistics operations in New Zealand, having bought what is now the state-owned KiwiRail from American investors who bought the rail service when it was privatised in the mid-1990s. It remains the biggest customer of state-owned KiwiRail.