Allcargo Logistics shares in focus as Q3 profit falls 88%

Shares of Allcargo Logistics Ltd will be in focus on Tuesday morning after the logistic firm said its profit for the December quarter plunged 88 per cent year-on-year (YoY) to Rs 17 crore  from Rs 146 crore in the same quarter last year. Reveue from operations declined 22 per cent to Rs 3,212 crore from Rs 4,127 crore, Allcargo Logistics told stock exchanges.

The financial performance was hit by significant losses incurred in select markets in US and Germany and both offices are expected to perform better during the 2024, leading to positive impact on consolidated Ebitda, it said.
 
Allcargo Logistics expects the global trade to revive in second half of 2024. In the near term, Red Sea crisis has taken out some capacity from market leading to balance against subdued demand, which should have marginal positive impact in April to June quarter, it said,

"The company has undertaken major cost reduction initiatives that will help significantly reduce the SG&A costs. The same shall help dilute the impact of new investments and inflationary increases and help the company to contain costs and improve profitability. In the short term Q4FY24 would have one off severance cost impact," it said,

Allcargo Logistics said its international supply chain business has bottomed out and performance remained flat sequentially.

"Domestic express business saw a decline due to change in yield leading to overall EBITDA
marginally lower QoQ. Consolidated Ebitda for the quarter ending December 2023, excluding
other income and exceptional income was marginally down at Rs 111 crore, compared to Rs 118
crores for the quarter ending September 2023," it said.

Allcargo Logistics the express logistics business under Gati has posted a 11 per cent growth in volumes during Q3FY24 as compared to same period last year. The increase in volumes has come on the back of sales acceleration initiatives and improved service levels which have helped gain wallet share, it said.

"However, change in product mix and yield has led to negative impact on profits. Balance sheet remains healthy with net debt of Rs 214 crore as of December 2023. The company is focusing on digitalisation, data security and centralisation of all its processes including its financial systems. 

Allcargo Gati merger
The company noted that shareholder of Allcargo Logistics will get 1:1 share in Allcargo ECU Limited in addition to their holding in Allcargo Logistics. Shareholders of Allcargo Gati (other than Allcargo Logistics itself) will get 63 equity shares of Allcargo Logistics
(post ISC demerger) for every 10 equity shares held by them. This factors in 3:1 bonus approved by shareholders of Allcargo December 2023.

 

 

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