OneLogix's logistics hub at Umlaas Road in KawZulu-Natal. Picture: Supplied
OneLogix Group has warned that it has become increasingly difficult to operate a logistics company in South Africa due to the great number of challenges that are outside its control.
The group’s shares are currently trading under a cautionary notice that warns of its possible delisting, following a transaction that it does not yet name.
The group said in a trading statement on Monday that: “Within this sluggish economic environment, it has become increasingly costly to conduct a logistics business in South and southern Africa, primarily due to the inability to recover various rising costs from our value chain.”
Headline earnings per share were expected to decrease by between 55 percent and 75 percent for the year ended May 31.
Headline earnings per share were expected to fall to between 2.8 and 5 cents after trading was affected by the weak economy, floods, cyberattack, civil unrest, violence on South African roads and other rising costs, including the effects of a hailstorm.
The group said there had been reduced economic activity during and after the civil unrest in KwaZulu-Natal in July 2021.
The subsequent cyberattack on Transnet’s operations further curtailed the flow of goods into and out of South Africa.
Persistent violent protests on South Africa’s national road network continued to present a serious challenge, while extensive infrastructure damage caused by flooding in KwaZulu-Natal in April this year further aggravated an already strained trading scenario, OneLogix’s management said.
In addition, a hailstorm in September 2021, which mainly affected OneLogix VDS, also caused considerable damage to a few large shipments of passenger vehicles being processed into the Umlaas Road open staging facility at the time, resulting in the group having to carry the risk for all minor repairs.
This incurred an expected claim cost, net of insurance proceeds, of R25 million.
In addition, OneLogix VDS, and to a lesser extent OneLogix TruckLogix, experienced reduced storage volumes resulting from global supply chain disruptions upon the completion of the new Umlaas Road phase 3 storage facility in January 2021.
This contributed to an additional R66m in lease-related accounting costs in the year.
The group said core headline earnings per share were expected to decrease by between 50 percent and 70 percent to between 4.1c and 6.8c for the year.
Nevertheless, OneLogix’s share price increased 5.77 percent to R2.75 on Monday afternoon.
Management said some of the group businesses performed above expectations despite the challenges, and on balance each of the businesses were well positioned in their markets with “resilient and innovative management teams” together with a strong customer base that would ensure sustainability.
The group expected it had sufficient headroom and adequate resources and access to facilities to fund operations for the foreseeable future.
The audited results for the current year were expected to be released on or about August 25.
edward.west@inl.co.za
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