Transport and logistics group Toll Holdings says resolving problems in its business in Japan and its marine shipping operations in Asia are its current priority.
Toll on Monday booked a 77 per cent fall in full year profit due to writedowns on some assets in Australia and Japan.
Net profit in the year to June 30 was $64.6 million, down from $281.4 million in the prior year.
The bottom-line result was pulled back by $203 million in impairments related to Toll Express Japan (Footwork Express) and Toll’s properties in Australia.
Net profit excluding one-off items was $274.2 million, down 5.8 per cent from $291.1 million in the prior year.
Toll said its businesses had a mixed performance amid challenging market conditions.
Meanwhile, Toll’s annual financial report showed that former Toll managing director Paul Little received a total remuneration of $6.4 million in fiscal 2012.
Mr Little retired from Toll on December 31, 2011.
The payments to Mr Little included $1.24 million in salary, $565,000 in short-term incentives, $1.9 million in leave entitlements, $1.5 million in termination benefits, and $1.19 million in options.
Toll shares were four cents lower at $4.51 on Monday.
Toll said industrial production and consumer spending in Japan had remained subdued since the earthquake and tsunami there in March 2011.
This had affected Footwork Express, Toll’s only business in Japan, which transports small volumes of freight of less than one truckload.
Toll said its Marine Asia business had experienced difficult trading conditions in 2011/12, with an oversupply of vessels in the Indonesian marine freight market affecting charter prices, and poor vessel utilisation hurting earnings.
The Marine Asia business transports thermal coal.
Toll managing director Brian Kruger said neither Footwork Express nor Toll Marine Asia was delivering acceptable returns, and Toll was reviewing each business.
“The number-one priority for us in this coming 12 months is to resolve the issues around Footwork and Toll Marine in Asia,” Mr Kruger said during a market briefing.
“While they’re not big loss-makers, and we’re still working on improving their bottom lines, the outcomes of the reviews for Toll Japan and Marine Asia will be absolutely key to improving the overall returns for the group.”
Mr Kruger said Toll needed to get more out of its existing businesses.
Some of Toll’s manufacturing and discretionary retail customers were doing okay, but the overall market in those sectors remained tough.
Toll also had to deal with increasing labour, property and other cost increases.
But there was a strong pipeline of opportunities in the resources sector.
Mr Kruger said Toll had not experienced any tapering off of activity arising from the resources boom.
“We’ve still got a very strong pipeline of opportunities both in the bulk mining sector in Queensland, in Western Australia, the gas developments off the coast of Queensland, off the coast of Western Australia, off the coast of the Northern Territory,” he said.
Toll said that in 2011/12 its global forwarding division continued to face challenging markets, especially in Europe and the US, where the retail and apparel sectors were especially weak.
On group outlook, Toll said it did not expect any short-term improvement in external conditions but recent new contract wins and ongoing investment in fleet, property and IT would support future earnings growth.
