QUBE reported a strong financial performance for the 2020-21 financial year. In its financial results announcement to the ASX the company reported underlying earnings growth (NPATA) up a record 31.7% from the previous year, at $159.6 million.

The company reported an underlying revenue of $2 billion, an increase of nearly 8% on the previous year.

The company’s full year results highlighted a continued investment in complementary acquisitions, equipment, facilities, and technology to support future earnings growth.

Patrick Terminals, of which Qube owns 50%, saw growth in market volumes and increased landside and ancillary charges. However, the report noted adverse impacts from industrial action in the period.

Qube Managing Director Paul Digney said he was delighted by the company’s delivery of a very good financial performance in FY21.

“This strong result reconfirms Qube’s robust diversified logistics strategy as the driver of earnings growth even during a pandemic,” he said.

“The result reflects high volumes across most of Qube’s core markets, including containers, grain, forestry, energy, and bulk, as well as higher container volumes and ancillary charges for Patrick.

“The second half of FY21 was particularly robust as the economy recovered from the effects of COVID and Qube also benefitted from a strong grain harvest.

“Despite the recent resurgence in the virus, we believe the outlook for Qube in FY22 is positive.”

Mr Digney paid tribute to Qube’s former managing director Maurice James, who stepped down at the end of June.

“This good result is a fitting finale to Maurice’s decade of leadership at Qube,” he said.

Operational highlights

Qube’s operating division reported underlying revenue growth of around 12.5% to $2 billion and underlying earnings growth (EBITA) of 29.5% to around $212 million.

The top 10 customers across the division represented approximately 19% of its total revenue and included mining companies, energy companies, shipping lines, retailers, and manufacturers.

The strongest areas of growth in logistics were New South Wales for grain and container volumes, and Queensland for Brisbane container activities.

The weakest region was Victoria, due to the impact of lockdowns and temporary closures of some of Qube’s manufacturing customers’ operations.

Qube reported consistent performance across Western Australia and South Australian operations.

Patrick operations

The announcement highlighted Patrick Terminals as a key contributor to the full year result, generating a strong cashflow.

Patrick’s distributions to Qube in FY21 totalled $120 million compared to just $20 million in the previous year.

Qube said Patrick’s volumes (in terms of lifts) increased by about 3.3%. Also Patrick secured several new services and extended several existing contracts.

Patrick’s overall market share declined from the previous year’s levels; however, the stevedore maintained a share of about 44% across its four terminals.

Qube reported increases in Patrick’s market share at its Melbourne and Brisbane terminals. But these were offset by declines in Fremantle (due to rationalisation of services) and at Port Botany (due to industrial action).

Health, safety, and sustainability

The full year results reflected an ongoing improvement in health and safety outcomes, with greater emphasis on increasing reporting, corrective action closures, incident closure rates and leadership tours.

Qube reported an improvement in lost-time injuries but identified the need to focus on reducing the number of total injuries.

The company further reported an improved sustainability performance, investigating options for a low-carbon future and implementing initiatives to reduce emissions and increase the installation of renewable energy across existing sites.

It implemented a modern-slavery framework complemented by an internal training package and introduced an initiative to provide additional paid leave to employees supporting charitable causes.