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Prime Mover Magazine


AHG Truck division stands out from company losses

Automotive Holdings Group’s (AHG) Truck division delivered profit amid other divisional losses for the year ended 30 June 2019.

AHG reported a loss after tax from continuing operations attributable to members for the year ended 30 June 2019 of $125.70 million compared with profit of $63.88 million in the prior corresponding period.

Operating non-IFRS profit after tax from continuing operations attributable to members for the year ended 30 June 2019 was $58.72 million compared with $75.24 million in the prior corresponding period.

Statutory IFRS EPS from continuing operations decreased to a loss of 37.9 cents (2018: 19.3 cents profit) due to the significant impairment against AHG’s Franchised Automotive assets and other unusual items totalling $184.42 million, plus a decrease of $16.52 million in underlying operating non-IFRS profit after tax.

Unusual items in the current year totalled $184.42 million after tax (2018: $11.36 million) – $139.74 million related to impairment of intangible assets associated with AHG’s Automotive Retail operations ($138.5 million) and a KTM goodwill impairment ($1.2 million) on divestment. Restructure and/or discontinued costs ($32.23 million) included trading losses on operations closed or committed for closure and/or restructuring and onerous lease provisions associated with these operations, and provision for expected current asset write-downs and/or for closure costs. Other impairments ($13.80 million) included IT and software assets and other current assets arising from impairment assets and fair value less costs of disposal. Finally, an unusual items credit of $1.3 million comprised $3.0 million profit from sale of properties offset by $1.7 million fees in relation to divestment and APE bid activities.

The Automotive Division delivered a statutory IFRS loss before tax of $102.02 million on $5.05 billion of revenue compared with a prior year statutory IFRS profit before tax of $94.06 million on $5.05 billion of revenue. This represents a decrease in statutory IFRS profit before tax due to the significant impairment expense on a consistent revenue figure. Operating non-IFRS profit before tax was $81.64 million compare with prior year $110.17 million, a decrease of 25.9 per cent.

The Truck division delivered a statutory IFRS profit before tax of $6.89 million on $600.35 million of revenue compared with a prior year statutory IFRS profit before tax of $6.53 million on $562.67 million of revenue. This represents a 5.5 per cent increase in statutory IFRS profit before tax on a 6.7 per cent increase in revenue.

The Other Logistics division delivered a statutory IFRS loss before tax of $23.51 million on $259.57 million of revenue compared with a prior year statutory IFRS profit before tax of $3.76 million on $262.46 million of revenue. This represents a significant decrease in statutory IFRS profit before tax and a 1.1 per cent decrease in revenue. The reduction in earnings was due to divestment activities, restructure costs and impairment expenses. Operating non-IFRS loss before tax was $0.57 million compared with prior year profit before tax of $3.76 million, attributed to divestment activities.

The Property division delivered a statutory IFRS profit before tax of $2.08 million compared with a prior year statutory IFRS loss before tax of $6.11 million. During 1H FY2019, AHG sold its remaining direct property interests.

AHG also commented on its discontinued operations.

The AHG Board of Directors committed to an active plan to sell its Refrigerated Logistics business as of 30 June 2019.

The Refrigerated Logistics division delivered a statutory IFRS loss before tax of $117.43 million on $573.63 million of revenue compared with a prior year statutory IFRS loss before tax of $63.85 million on $580.31 million of revenue. This represents a significant increase in statutory IFRS loss before tax and a 1.2 per cent decrease in revenue. The reduction in earnings was due to the impairments expensed in FY2019. Operating non-IFRS loss before tax was $12.93 million compared with prior year loss of $19.90 million).

AHG, with the assistance of external advisors, conducted a receivables review following extensive upgrades to the Refrigerated Logistics division’s computer systems. The receivables review has shown a material overstatement of revenues in FY2018 which arose as a consequence of complexities associated with, among other matters, the introduction of the new computer systems for transport management. This overstatement was $17.94 million pre-tax and has resulted in a restatement of AHG’s FY2018 results and of Refrigerated Logistics’ performance.

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