K&S Corporation results announced

K&S Corporation has announced a net profit after tax of $15.9 million for the year ended 30 June 2013, a reduction of three per cent on the previous year. Operating revenue for the transport logistics and supply chain group for the year was up 1.8 per cent to $564.6 million.

Greg Stevenson, K&S Corporation Managing Director, said the latest full year result reflected distinctly different trading conditions across the opening half and second half.

“In the opening six months, we experienced extremely strong demand for logistics and transport services increasing revenues by eight per cent to $293.5 million,” said Stevenson. “This was driven by the resources sector, with demand from manufacturers at a consistent level.

“In contrast, there was a reduced demand across all sectors in the second half as the economy slowed, with revenues declining by 4.2 per cent to $271.1 million.”

While the company’s first half profit after tax recorded a 37.4 per cent increase to $10.1 million, profit in the second half declined to $5.8 million.

Stevenson said activity in the resources sector slowed in the second half of 2012-2013 with declining commodity prices and miners looking to reduce their costs and scale back a number of expansionary projects.

“The manufacturing sector was impacted by higher operating costs and the high Australian dollar with imports reducing demand for locally manufactured goods,” said Stevenson. “This in turn has reduced demand for transport services.

“During the difficult second half of the year we continually reviewed our cost base and reduced variable costs from the Group’s operations. We have reduced our subcontractor costs, casual labor and overtime costs as volumes have declined.”

On October 31 2012, K&S Corporation acquired the business and assets of Bunbury based Collare Transport for $8 million. Collare has a strong focus on the timber industry in Western Australia and the business has now been integrated into K&S Corporation’s other Bunbury business that was formerly known as Brookes.

Commenting on the outlook for the 2014 financial year, Stevenson said providing earnings guidance in these weak economic conditions is extremely difficult.

“Our balance sheet and gearing are conservative and they place us in a good position to take advantage of any appropriate acquisition opportunities that come our way,” said Stevenson.

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