The single entity, which now comprises the various parts of the Scott’s group of enterprises has released its half year results. The after tax loss of $88.4 million for K&S, in the six month period up to December 31, is 56 per cent worse than the same result last year, but better than the predicted 75 per cent, as announced in guidance to the stock market in November last year.
K&S have taken a hit due to the downturn in some parts of the economy. The company has a number of operations, especially in Western Australia, linked to the resources industry and these have seen lower activity levels as mining activity slows. Falling commodity prices sees miners pulling their collective heads in. This has effected both new projects and current mining operations, both of which are served by K&S.
Overall, operations in Australia were down for the South Australia based operation. Operating revenue fell 1.4 per cent year on year in the second half of 2015. However, cash flow was up 8 per cent in the same period.
According to a statement from K&S, the losses would have been considerably larger if it wasn’t for the revenue from the NTFS and Aero Refuellers operations the company acquired last year and some new distribution contracts coming online.
2015 saw K&S continue to rationalise its operations as it integrates the different parts of the business and digs in to cope with the new economic climate. A new facility at Hazelmere in WA has enabled the business to rationalise property assets in the area and reduce leasing costs. There has also been an integration of NFTS and K&S facilities in Port Adelaide.
Looking to the future, the K&S statement reiterates the issues around the resources slowdown and talks about the difficulty of predicting future earnings in the current climate. However, the company does assert these rationalisations will have the business in a position to capitalise on growth when it does occur.