Allcargo Logistics Limited has released its financial results for the quarter ending March 31, 2024, highlighting several key developments across its diverse business segments.
The International Supply Chain segment is showing early signs of growth, expected to accelerate in the latter half of 2024. Despite the addition of 1 million TEUs to container shipping capacity this year, freight rates are on the rise. This positive trend suggests a robust recovery in global trade logistics, bolstering Allcargo’s outlook for the future.
ECU Worldwide experienced a steady quarter, with performance largely unchanged from the previous period. Looking ahead, momentum is anticipated to build from April, with significant improvements expected by the September and December quarters. LCL (Less-than-Container Load) volumes saw a slight decline from 2.16 million CBM to 2.12 million CBM, while FCL (Full-Container Load) volumes increased marginally from 152K to 156K TEUs. These mixed results indicate a stable but cautiously optimistic outlook for the segment.
Allcargo has undertaken substantial cost reduction measures, although these have been partly offset by severance costs. These costs are expected to conclude by August, paving the way for the full benefits of cost reductions to materialise. This will assist in managing annual salary increments and controlling Selling, General, and Administrative (SG&A) expenses, ultimately driving bottom-line growth.
The Contract Logistics segment remained relatively flat, with the company’s subsidiary ASCPL reporting an EBITDA of ₹32 crore for Q4 FY24. This stability underscores the segment’s resilience amidst broader economic challenges.
The Express business, particularly through Gati, has shown marked improvement due to effective cost reduction strategies. This has led to progressive monthly improvements culminating in a healthy exit rate on operating costs by March. Gati’s consolidated EBITDA rose from ₹11 crore in Q3 to ₹14 crore in Q4 FY24, marking a significant 21% increase.
Allcargo continues to prioritise technological advancements. GEMS 2.0 is progressing as scheduled within Gati, and several system rollouts are on track at ECU Worldwide, including a new financial ERP system. These initiatives are expected to enhance operational efficiency and drive future growth.
Allcargo Logistics remains committed to leveraging these developments to strengthen its market position and deliver sustained value to its stakeholders. As the company navigates through 2024, it is poised for growth across its various business segments, supported by strategic cost management and technological innovation.
