Qube launched its grain-trading enterprise in December 2023. Photo: Qube
LOGISTICS company Qube is optimistic about the prospects of its grain-trading arm, which has reported a revenue of $141.9 million in its financial results for the year ending June 30.
Qube launched the venture in December, and it has contributed more than 9 percent to the revenue of the ASX-listed company’s logistics and infrastructure division.
Qube managing director Paul Digney told shareholders that grain trading had already “proven to be very strategically beneficial for us”.
He said the quantities of grain traded in the first few months of operation were “probably better than expectations”, and that the company was “really confident” in the operation moving into FY25.
The company made the move into the trading space to make better use of its New South Wales grain infrastructure assets.
Qube started acquiring these in 2020 with the purchase of the Quattro terminal at Port Kembla and Agrigrain’s sites at Coonamble and Narromine, followed by the Newcastle Agri Terminal in 2021, and Viterra’s Narrabri Agri-Storage and Handling Facility in October 2023.
Mr Digney said the move would enable the assets to be utilised throughout the year, and also to maximise flows during drought years.
“One of the reasons we have done that is really to help us out in…medium to low seasons…to move through assets.”
Qube chief financial officer Mark Wratten said the business also brought little “downside risk” in terms of revenue, as grain was less volatile than other commodities.
He said, given the strong outlook for NSW’s upcoming harvest, the company expected to see revenue to more than double in FY25 for the grain-trading operation.
Mr Wratten said the company was seeing early benefits from the Narrabri acquisition, although this had not flowed through into earnings contributions.
“Although these assets weren’t expected to contribute to earnings in any meaningful way in the short term they have been important for us in setting up our grain-trading business, particularly in regards to the containerised grain we are now trading,” Mr Wratten said.
Earnings, revenue up
Across the group, Qube reported underlying earnings before interest taxes and amortisation of $318.4M, up 13.6pc on FY23, and underlying revenue growth of 17.2pc to $3.5 billion.
The logistics and infrastructure business unit recorded revenue growth of 15.3pc to $1.548B and EBITDA of $309.1M, a rise of 8.6pc on FY23.
Mr Digney said these results were driven by high container and automotive volumes, which partially offset weaker agri-volumes and increased Moorebank Logistics Park start-up losses.
He said these lower volumes were a 55pc reduction on FY23.
“However, in 2025 we’re expecting to have a strong year for agri,” Mr Digney said.
“How strong that is we will know better in the coming months as we finalise volume commitments and terms with our customers in the short term.”
Revenue from the agri customers fell $78M from FY23 to $201.2M.
The unit now represents 13pc of the business unit, down from 20.8pc in FY23, with major contributions coming from container handling and terminal services, and manufacturing-sector and food-processing customers.
Moorebank milestone
The financial year marked the official opening of the MLP import/export terminal (IMEX) in May which Qube operates in a joint venture with National Intermodal Company and LOGOS.
Mr Digney said in July, Qube handled 24,000TEU through the IMEX and was “targeting for approximately 400,000TEU to be handled by the Moorebank IMEX in 2025”.
He said the terminal recorded an EBITDA loss of $4.4M in FY24, but was expected to be profitable on a run-rate basis by June 2025.
Mr Digney said the company was considering the future uses and ownership structure of the terminal.
“Currently there are active conversations for potential uses of the terminal, although no agreements…have been signed yet.
Qube announced the acquisition of the Melbourne International RoRo and Automotive Terminal (MIRRAT) from Wallenius Wilhelmsen in May. Photo: Qube
“In conjunction with that, we are assessing the right ownership structure for the terminal going forward, and that could include signed-down equity in this asset.”
New business acquisitions
Since the Narrabri purchase, Qube announced new business acquisitions, including the purchase of Western Australian container transport and logistics operator Stevenson Logistics; the Melbourne International RoRo & Automotive Terminal (MIRRAT); and WA transport, logistics and storage business, Colemans.
Integration of the Stevenson operation is progressing, and the acquisition is expected to expand Qube’s capabilities and exposure to the hay and agri-export market in WA.
As announced in May, Qube purchased MIRRAT for $332.5M, with completion expected in the first half of FY25, subject to ACCC and Port of Melbourne approval.
MIRRAT is the only dedicated roll-on roll-off terminal servicing the Victorian market, and features three berths, a 120-tonne gantry crane, 8000sqm of undercover storage, and two quarantine wash bays.
Qube announced the $119M purchase of Colemans alongside its FY24 results.
Colemans currently services the Security Sensitive Ammonium Nitrate supply chain in WA.
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