Qube Holdings ((QUB)) will shortly announce its first tenant for Moorebank warehousing, a catalyst brokers are keenly anticipating. The company has stated the first tenancy will include a purpose-built warehouse developed for the customer via a long-term logistics contract with Qube. The company will undertake a $350m capital raising to fund both new warehousing and further opportunities.
Freight, port and logistics firm Qube will make one of the largest non-mining investments in the country with a five year plan to spend upwards of $400 million developing a new freight hub in Sydney’s southwestern suburbs.
Finding a solution to the inefficient and complex logistics industry in NSW is difficult but Qube Holdings (QUB) appears to be heading down that track. That’s the view Ord Minnett takes in initiating coverage on the stock. The going may not be easy but in the longer run, if the Moorebank intermodal terminal is successful, it will be rewarding. The Moorebank intermodal will include a large freight hub and a rail shuttle to Port Botany.
The Patrick division of Qube Holdings (QUB) has lost its contract with the Asia Australia consortium, which Macquarie calculates to represent 225,000 containers annually. The loss of the contract may not be material for the group in FY17 but represents a material loss to Patrick.
While everyone, especially the media wanted to know what his thoughts on the move to gazump the Brookfield bid for Asciano (AIO), Qube (QUB) chair, Chris Corrigan yesterday, made sure shareholders fully understood the tough outlook the logistics group faces in the next year.
Qube’s result fell -5% short of the broker, leading to a -12% downgrade to forecast earnings in FY18. Consolidated divisions and the Patrick JV met expectations but the broker sees lower Patrick earnings ahead, along with higher corporate costs and interest charges.
The company’s Patrick joint venture has announced material increases in infrastructure surcharges from July 10. Rates will increase to $33 per full container movement in Brisbane and $32 in Melbourne. Additionally, a new infrastructure surcharge of $26 per full container and Sydney and $5 in Fremantle has been announced.