War and weather cost Qube

QUBE, Australia’s biggest integrated logistics provider has told the Australian Securities Exchange (ASX) that the Middle East conflict and adverse weather will have an impact on earnings of $10-$20 million (EBITA) in FY26.

The notice said volumes across most of Qube’s markets have remained healthy despite higher fuel costs and some disruptions to domestic and global supply chains due to the conflict and this was expected to continue for the remainder of the 2026 financial year.

It said the factors impacting on earnings are largely temporary or timing related and are expected to be mainly attributable to:

• Higher fuel costs due to timing lags in recovering these costs from customers, but there should be an offsetting benefit in FY27 when fuel prices reduce.
• Lower agri volumes due to higher shipping costs and inability of vessels to reach key markets in the Middle East.
• Lower forestry exports due to higher shipping costs. The largest earnings impact is expected to be in the Logistics & Infrastructure business unit with a more limited impact on the Ports & Bulk business unit.

“The earnings contribution from Qube’s associates is not expected to be significantly impacted in FY26,” the statement said.

“The actual earnings impact may vary from this estimate and will depend on market conditions over the remainder of FY26.

“Qube has robust supply agreements with two of Australia’s major fuel suppliers and has continued to receive fuel supplies in line with normal trading volumes, with no interruption currently expected to Qube’s operations.

“Qube also has strong contractual protections in place across most of its operations, as well as effective commercial levers that are expected to enable the business to largely mitigate these challenges.

“However, there is likely to be a timing lag between the incurrence of higher costs by Qube and the subsequent recovery of those costs under customer contracts."

The markets in which Qube operated were said to have "favourable long-term growth outlooks" and had collectively proven to be highly resilient in times of prior market disruptions including weather events, economic cycles and the recent pandemic.

“Consistent with this pattern, over the medium to long term, major events such as those occurring now have tended to be beneficial for Qube as customers are inclined to hold more inventory (rather than rely on just-in time supply chains) and customers place greater value on logistics providers with a demonstrated record of reliability and strong financial and operational capability," the company stated.

“Qube also expects that recent events are supportive of an acceleration in investment in new alternative energy projects. This is a market in which Qube has strong relationships with the major industry participants and can offer an unrivalled range of logistics solutions to support these activities.”

The notice said Qube’s operations were impacted by several severe weather events in Australia and New Zealand with cyclones causing operations to cease in some regions for up to a week.

Qube’s Western Australian Ports & Bulk operations was particularly impacted and forestry activities in New Zealand were impacted in January by severe storms that caused major flooding which affected volumes at a number of Qube’s locations.