Australia-based logistics group Toll Holdings is struggling to make money in increasingly competitive logistics markets despite ongoing pressure from parent Japan Post Holdings, whose market value has slumped to all-time lows as it tackles an insurance scandal.
A report in the Australian Financial Review (AFR) said Toll reported a net loss of A$113.8 million for the 12 months to March 2019 compared with a profit of A$11.2 million a year
earlier, according to the company's annual report.
The loss, which was partially attributed to higher transport, fuel and restructuring costs, was recorded despite Toll bolstering its annual income with property and equipment sales and reversing $61.5 million of provisions, the AFR report noted. It added that the losses have continued in 2019.
More work to do!
Last month Japan Post reported that its international logistics business - which includes Toll, JP Toll Logistics and Toll Express Japan - delivered a A$24 million net loss for the three months ended June compared with an A$8 million loss a year earlier. Toll has attributed the losses to increased competition putting pressure on profit margins, greater congestion damaging productivity and more compliance requirements.
AFR quoted a spokeswoman as saying that "While we have made good progress on our transformation programme despite ongoing market and industry challenges, we have more work to do.
Irritating anonymous allegations
Toll's management team, led by chief executive Michael Byrne, has been trying to increase profits after Japan Post admitted it had paid too much for the Australian logistics group.
Japan Post bought Toll for A$6.5 billion in 2015 but the Australian group subsequently incurred losses and the Japanese company was forced to take a A$4.9 billion write-down in 2017.
Japan Post brought in a new management team and Toll returned to profit in 2018 after three years of losses but the 2018 results were boosted by property and equipment sales.
Toll received anonymous allegations that the logistics group's financial situation had been made to look better than it actually was, but the company has denied the claims following an investigation.
Japan Post needs Toll to be profitable because the Japanese government, which owns 57% of the Japanese company, wants to sell its remaining shares.
Nol van Fenema
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