Brexit led to a decline in freight services at the end of March this year and a new freight management system introduced at the company caused problems in its operation, according to Waberer’s Q2 report. As a result, the revenue of the Hungarian transporting giant moved down by 6% in Q2 2019, 300 trucks were handed back but management is still optimistic.
In the second quarter of 2019, Waberer’s revenue declined by 6% to EUR 173 million due to Brexit’s cut-off date at the end of March, so the company operated with reduced vehicle capacity and lower volumes.
Waberer’s had no luck with the introduction of its new freight management IT system either.
The new SAP-based transportation management system launched in April had serious functionality and performance issues in the first weeks, with some days of a complete breakdown of the system, leading to loss of orders and the inability to invoice. The resulting loss of business also had a notable impact on our April results, although without long-term effects” – Robert Ziegler, CEO of Waberer’s, commented on the numbers.
Recurring EBITDA was 41% lower year-on-year at EUR 12 million, resulting in an EBITDA margin of 6.9%, 4.1 percentage points lower than a year ago. Recurring EBIT marked a loss of EUR 5.9 million in the second quarter of 2019 with recurring EBIT margin at -3.4%, 5.2 percentage points lower than in the same period last year. Lower EBITDA margin and 5% higher depreciation and amortisation both contributed to the lower EBIT margin. The increase in depreciation, despite a decrease in the number of trucks – 300 trucks were handed down -reflects the interim effects of the fleet reduction programme underway as already deactivated units are temporarily depreciated until the selloff process finalises. Depreciation is on a decreasing trend when compared to the fourth quarter of 2018 and the first quarter of 2019.
Financial results marked a loss of EUR 1.7 million in the second quarter of 2019. The implied interest rate for the first half of the year remained under 1.5%
The transformations will bring the desired results, management hopes.
Despite the difficulties, the transformation program is still ongoing. Although the positive effects of the measures will be slower than expected, savings in SG&A costs are already visible in the figures and are expected to improve in the second half of the year.
In the commercial area, we have successfully increased the share of our contracted business and improved the coordination between contracted and spot sales. We are also more proactive in hunting for new clients in regions that better balance the positioning of our fleet.” – Ziegler added.
Regardless of the higher net debt ratio, Waberer’s financial position remains stable, with a decline in nominal net debt for the remainder of the year as the full effect of the Fleet Reduction Program will be reflected in the balance sheet.
The first quarter was not brilliant either
The first quarter of 2019, Waberer’s revenues increased by 2% to € 182 million. The company continued to achieve higher prices, but encountered less predictable traffic than its vital international customers, adversely affecting truck capacity utilization. Domestic volumes increased notably in warehousing and bulk transport.
The financial result for the first quarter of 2019 was a loss of EUR 0.9 million, while the regular net profit was a loss of EUR 4.4 million.
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