CTI Logistics warns on profit

Trucking company CTI Logistics has foreshadowed a marginal profit for the latest half-year, saying weak economic conditions particularly in Western Australia had resulted in significant reductions in activity and increased margin pressure.

West Perth-based CTI said the margin pressure applied across a wide range of clients.

Its half-year profit has also been affected by the continued investment in expanding its WA regional freight operations and expansion costs in Melbourne Sydney and Brisbane.

CTI said net profit before tax for the full year to June 2019 was expected to be about $4 million. This followed a half-year profit before tax of $4.1 million - hence the marginal or break-even number expected in the second half.

Both numbers have been adjusted by adding back the contingent consideration of $2.3 million relating to the purchase of Jayde Transport, as reported with the half-year results. 

The margin squeeze was highlighted by the fall in underlying earnings before interest, tax, depreciation and amortisation.

EBITDA for the year to June 2019 is expected to be $14.9 million, down from $16.0 million in the prior year.

That’s despite revenue growing to $211.9 million from $182.9 million.

A breakdown of the annual numbers indicates EBITDA will fall from the $9.8 million in the first half (as reported in February) to $5.1 million in the second half.

Similarly, revenue will fall from $111.8 million in the first half to $100.1 million.