Allcargo Logistics Limited. Board has approved issuance of 3:1 bonus shares and announced its financial results for the quarter ended September 30, 2023. The board meeting was held on Friday, 10th November 2023
Key highlights:
- The Board has approved the issuance of three bonus shares for each share held by the shareholders. The decision is aimed at improving the liquidity and allowing for broader base participation of shareholders in the company. This shall also facilitate the strategic restructuring plans.
- The company has built significant reserves over the years and the issuance of bonus shares will use less than 15% of the available reserves. The company recently demerged two businesses which were listed on 10th August 2023 and the board considered it appropriate to issue bonus shares post the completion of the demerger.
- The company has exhibited strong performance over the last several years and taken significant initiatives to deleverage the balance sheet, which has resulted in very low net debt as of September 30th. This is remarkable considering the recent acquisition of balance shares from minority shareholders in Gati Express Supply Chain as well as Allcargo Supply Chain and increased shareholding in Nordicon to 90%. This has been enabled by strong internal accruals.
- The company has demerged strategic business undertakings and exited non-core businesses successfully. The business is now driven by asset light approach with digital strategy being the fundamental pivot for future growth. While the current macroeconomic environment has unexpectedly led to significantly lower performance in recent quarters, the company is hopeful that the prudent approach by the company over the years, that led to a very strong balance sheet, will provide a strong base for future growth.
- The company’s flagship subsidiary ECU Worldwide continues to strengthen its global market leadership in the LCL consolidation business due to significant efforts & investment in acquisitions, acqui-hiring & transformation of the business on an ongoing basis, despite challenges and headwinds.
- The company has always made best effort basis to help reward the shareholders. Hope that the shareholders will stand to benefit from the bonus issue.
- Our strategy is to focus on market share and volume growth amidst higher competitive intensity. Most leading international forwarders have reported a volume decline ranging from -4% to flat YoY in Q2FY24, this was accompanied by a decline in yields ranging from -25% to -38%. Our LCL volumes are down 3% YoY and FCL volumes have remained flat YoY.
- Consolidated EBITDA for the quarter ending September 2023, excluding other income and exceptional income, de-grew to ₹ 118 crores, compared to ₹ 139 crores for the quarter ending June 2023. The de-growth was primarily driven by the performance of ISC business that is witnessing global demand headwinds. • The express logistics business under Gati has posted record volumes in the past quarter driven by strong pickup in festive demand. Contract logistics business under Allcargo Supply Chain continues to demonstrate robust growth in revenue and EBITDA for the numbers reported for Q2FY24.
