Port headwinds put brakes on Chalmers

Lower container volumes and higher costs combine to slice profits by a third compared with previous first half

February 26, 2013

Flat revenues and increased Brisbane property costs served to take the wind from the sails of port-focused haulage firm Chalmers.

Not helping matters in the first half of the financial year were lower volumes coupled with competitive price pressure and increased container park facility repairs and maintenance, along with increased subcontractor costs.

The combination led to a 32 percent fall in profits attributed to shareholders to $886,000 from $1.29 million in the previous first half.

Despite that, revenues rose 1 percent to $30 million.

Subcontractor costs were up 13 percent to $2.5 million, while property costs rose 11 percent to $3.6 million.

"Increased subcontractor expense was incurred as variable ad hoc work was channelled by necessity to third party providers," Chalmers states.

"Increased property costs were the result of rising leasehold costs and the Port of Brisbane in combination with a capacity expansion towards the end of the current period in anticipation of increased demand for storage services."

Demand in Brisbane contrasted with Melbourne port operations going off the boil, with "revenue growth in transport of 3 percent being offset by a relatively similar percentage decline in container volumes".

"The broad outlook with in the transport sector continues to be a highly competitive one where some operators are maintaining downward pressure on rates in an effort to retain and/or increase market share," the company reports.

In the face of such headwinds, Chalmers says it is positive about the prospects for both its transport and container services arms.

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