A year ago, Perth-based transport group CTI Logistics upgraded its pre-tax earnings outlook for the December 2022 half year to a 90 per cent from the previous estimate of 60 per cent.
As it was, 2022-23 pre-tax earnings grew more than 81 per cent to $15.68 million, but a slowdown in the six months to June saw most of that growth disappear, and the company reported a 12 per cent rise in before-tax profit to a record $24.7 million.
A year on from the upgrade and CTI has issued a downgrade — not as dramatic, a 30 per cent fall in pre-tax profit is now the guidance for the half year to December 31.
That will put the pre-tax profit around $12 million, and CTI has made it clear the six months to next June could see more of the same, meaning that the $24 million figure for pre-tax earnings for 2022-23 will not be reached.
Directors said in a statement to the ASX Thursday evening that “as reported, the result for the previous corresponding period benefitted from increased demand for premium freight services due to supply chain disruptions and natural disasters, as well as customers incurring additional transport and warehouse storage costs to ensure their product was closer to the point of sale.
“The current half year reporting period has seen a normalisation of customer supply chains, consistent with the half year to 30 June 2023, with fewer supply chain disruptions and less consequent demand for premium freight services.
“Profit margins for the period have also been impacted by inflationary pressures, with increases in supply-side costs, including greater than expected wage rate rises, increased subcontractor costs, increased property and insurance costs and rising interest rates.
“As a result, trading volumes and activity could be impacted in the second half of the financial year to 30 June 2024.
“The Company continues to generate strong cash flow and plans to complete the development of the remaining land at Hazelmere in Western Australia.”