4.0 - Imperial

from October 2008 with a general slowdown
in manufacturing, mining, fuel, commodities,
construction, as well as imports and exports.
By contrast, the distribution of fast-moving
consumer goods was more resilient, although
volumes declined in the second half. The
division has a well-balanced portfolio of
businesses that can benefit from changing
over-spending patterns towards more
affordable products.
In addition, the national transportation strike
which persisted for nine days in April 2009
proved costly.
International logistics
A number of valuable new contracts were won
during the year. These are absorbing some of
the capacity created by lower demand.
The fleet size grew marginally to just over
5 500 vehicles. The average age of the truck
tractor fleet is approximately 3,5 years.
Net working capital decreased by R366
million, and gross capital expenditure was
R201 million lower at R608 million.
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Imperial Logistics
International is known
for its customer
focus in developing
lasting solutions for
international logistics
challenges. This will
position the company well
for the difficult trading
conditions expected for
much of the new financial
year before a slow
recovery takes hold.
2009 2008 Change H2 H1 Change
Rm Rm % Rm Rm %
Revenue 8 046 8 253 (2,5) 3 360 4 686 (28,3)
Operating profit 320 403 (20,6) 118 202 (41,6)
Operating margin (%) 4,0 4,9 3,5 4,3
The downturn in international demand for
steel, industrial chemicals and automotive
products affected business volumes.
Important customers in the steel industry
curtailed production by shutting furnaces as
scheduled maintenance programmes were
brought forward.
Imperial Logistics International’s operations
include logistics services, warehousing,
clearing and forwarding, container operations
and multi-modal transportation. Global
services range from complex warehousing
and distribution projects to made-to-measure
water, air and land transport.
Importantly, the business is known for its
customer focus in developing market and
future-oriented solutions for national and
international logistics challenges that satisfy
high standards of quality, reliability and
transparency. Imperial International manages
four logistics services providers and their
subsidiaries and affiliates:
u Imperial Reederei – Europe’s leading
inland shipping company with a transport
volume of over 45 million tonnes per
annum, focused on bulk cargo and
container shipping in European river and
canal systems, and dovetailing effectively
with its inter-modal operations.
u Panopa Logistik – customised contract
logistics services provider specialising
in highly complex services focused
on automobile, steel and spare parts
logistics with a blue-chip customer base.
u
Neska – market leader for transshipment
and warehousing along the Rhine River
and European market leader in ferroalloy
handling, with extensive storage and
warehousing facilities in Germany and
Belgium. The company uses a multimodal
system combining truck, rail
and ship for national and international
customers.
u Brouwer Shipping and Chartering –
backed by a global network of established
relationships, Brouwer focuses on ship
chartering and transportation of bulk and
other cargo such as steel, scrap, tubes
and pipes, coke, coal, fertiliser, grain and
fodder.
During the year, Imperial Logistics International
acquired Hansmann, a logistics provider
to the automotive industry in Wolfsburg,
Germany, and Garex which provides similar
services in Poland.
Results
After a good start, the global economic crisis
caused a dramatic reversal in the second
half of the period, although the business
remained profitable and managed to contain
the pressure on margins.
The business responded by cutting costs
aggressively. The inland waterway shipping
business, Imperial Reederei, was hardest hit
by the European recession. Fortunately, some
of this decline was absorbed by cancelling
short-term charters with shipping suppliers.
The port-handling activities in Neska were also
affected but cost structures were adjusted
to limit the impact. The contract logistics
and steel distribution businesses in Panopa
equally challenging showed reasonable
resilience under circumstances.
Due to weak trading in the road transport
businesses of Gillhuber and Laabs, goodwill
on those acquisitions was impaired.
We expect difficult trading conditions to
persist for much of the new financial year
before a slow recovery starts.
imperial holdings limited Annual Report 2009 19