Transport and logistics group K&S Corporation has warned investors of a significant fall in half-year net profit, due to a significant slowdown in the company’s Western Australian operations.
K&S said today it expected net profit for the first six months of financial year 2014 to come in 55 per cent lower than the previous corresponding period.
The trucking group lodged a net profit of $16.4 million in FY2012.
The company’s 2013 full year result is due to be released by October 4.
K&S said its falling revenue was the fault of lower activity levels in the resources sector in WA, exacerbated by increased competition for the available work.
“We are continuing to reduce costs better to align the company’s cost base with current volumes,” managing director Greg Stevenson said.
“Recent contract wins in Western Australia for Argyle Diamond and Kimbeley Dimaond will help drive revenue through our Regal General Freight business.
“Our Regal Heavy Haulage business also has a substantial order book for the balance of FY2014, with that work flow about to commence.”
K&S was reluctant to provide earnings guidance for the second half of FY2014, but said the lower Australian dollar, historically low interest rates and newly-announced infrastructure projects, as well as a fresh government in Canberra, could provide stimulus to the domestic economy.
The company said it would continue to consider potential acquisition opportunities if they make strategic sense.
