Qube (ASX:QUB) share price struggles despite record profit

Shares in the transport and logistics company are down today after the release of its FY21 earnings.

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The Qube Holdings Ltd (ASX: QUB) share price is down on Thursday after the company released its full-year report for FY21.  

Despite reporting a record profit, shares in the logistics company are trading lower for the day.

Let's take a look at how Qube performed for the full year.

Highlights from Qube's full-year report for FY21

  • Record underlying earnings (NPATA) of $159.6 million  
  • Annual net profit of $91.6 million, 4.7% increase on prior corresponding period (pcp)
  • Underlying revenue of $2,0032.4 million, a 7.9% increase on pcp
  • 14.1% increase in Underlying EBITDA of $182.9 million on pcp

Qube noted its strong balance sheet. As a result, the company increased its full-year dividend by 15.4% to 6 cents per share.

In addition, Qube said it has repaid FY21 JobKeeper payments that the company applied for and received.

What happened with Qube in FY21?

In its announcement, Qube noted that the key drivers of the earnings growth were its operating division and Patrick container ports.

For the full year, the company's operating division experienced high volumes across most parts of the business. In particular, container, grain, forestry, motor vehicles and bulk volumes were particularly strong.

Patrick contributed $41.3 million of Qube's profit, a 59% increase on the year prior.  The company noted that Patrick benefitted from growth in market volumes and increased landside and ancillary charges.

In addition, Qube's property division reported a $2.1 million loss compared with a $4.9 million loss a year earlier.

What did management say?

Qube's Managing Director Paul Digney highlighted:

This strong result reconfirms Qube's robust diversified logistics strategy as the driver of earnings growth even during a pandemic. The result reflects high volumes across most of Qube's core markets, including containers, grain, forestry, energy and bulk, as well as higher container volumes and ancillary charges for Patrick. The second half of FY21 was particularly robust as the economy recovered from the effects of COVID and Qube also benefitted from a strong grain harvest.

What's next for Qube?

For FY22, Qube expects to deliver solid underlying earnings growth.

However, the company acknowledged that forecasts were based on no deterioration in the COVID-19 pandemic.

Qube expects to be in a stronger financial and operating position once it completes the sale of its Moorebank freight hub.

As a result, the company expects to emerge with a more predictable earnings profile from its attractive, highly diversified, and strong cash generative logistics operations.

At the time of writing, shares in Qube are trading around 2% lower for the day at $2.98.

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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