OneLogix CEO Ian Lourens said that all of the niche logistics provider’s 12 companies remain in good health, despite the impact of the Covid-19 pandemic.
The group reported a 16% drop in revenue, to R1.22-billion, for the six months ended November 30, compared with the same period in 2019.
Lourens says the decline in earnings was primarily due to the listless Covid-19 economic environment.
Operating profit, excluding capital items, decreased to R71.2-million, from R93.5-million.
This number was affected by one-off retrenchment costs of R8.8-million, predominantly in the OneLogix Vehicle Delivery Services business.
“Our financial position at the end of the period and the resources available to the group have successfully reinforced that we have a solid platform capable of navigating the prevailing and expected difficult and volatile trading environment,” says Lourens.
“If Covid-19 was a test, all our businesses successfully passed the test.”
He adds that, although OneLogix United Bulk – the only business to show a loss – was subjected to an unprotected strike that significantly impacted on operations late in the period, it continued with its productivity- based reinvigoration process, with the results expected to become evident in the coming months.
“This business has now successfully been turned around,” says Lourens.
Post the end of the period, shareholders authorised the implementation of the sale of the Umlaas Phase 3 automotive development for a total consideration of R310-million, as well as the subsequent leaseback of the property from the buyers.
Also post the end of the period, with effect from December 1, the group acquired a 100% interest in specialist agricultural equipment logistics company Agritrans.
“Agritrans, which is based in Frankfort, in the Free State, is a well-established and respected operator with blue-chip customers in South Africa and neighbouring countries,” says Lourens.
“There have been immediate managerial, operational, fleet and marketing synergies for the group.”
Looking ahead, Lourens says that trading conditions for all group companies are expected to remain difficult for the foreseeable future.
“We are experiencing a significant reduction in vehicle-stockholding volumes in our storage yards as a result of the reduced stockholding models implemented by the original-equipment manufacturers (vehicle manufacturers) to navigate current trading conditions.”
Lourens says OneLogix has already significantly diversified away from its initial economic reliance on the automotive industry.
“About ten years ago, we were 80% dependent on motor vehicles. Over the years, we have deliberately and systematically looked to diversify, and it now constitutes between 25% and 30% of our revenue.
Going forward, our strategy remains unaltered.
“We will continue to focus on extracting maximum efficiencies from existing businesses to protect and grow their individual market shares in their respective niche markets.
“We expect acquisitive opportunities to continue, given the severity of the economic difficulties, and we’ll continue to assess these appropriately, together with further startup opportunities.”