Allcargo Logistics Q3 net profit drops 88%

Allcargo Logistics reported an 88 percent drop in consolidated net profit at Rs 17 crore for the third quarter ended December 31, 2023 compared to Rs 145 crore in Q3FY2023.

Revenue from operations declined 22 percent to Rs 3,211 crore as against Rs 4,217 crore, says an official release.

For the first nine months of financial year 2024, profit declined 75 percent to Rs 152 crore from Rs 601 crore. Revenue was down 33 percent to Rs 9,789 crore.

"The company expects global trade to revive in the second half of 2024. In the near-term, the Red Sea crisis has taken out some capacity from the market, leading to balance against subdued demand, which should have marginal positive impact in the April to June quarter.

"The company has undertaken major cost reduction initiatives that will help significantly reduce the SG&A costs. The same shall help dilute the impact of new investments and inflationary increases and help the company to contain costs and improve profitability. In the short-term, Q4FY24 would have a one off severance cost impact."

International supply chain business has bottomed out and performance remained flat QoQ, the release added. "Domestic express business saw a decline due to change in yield, leading to overall EBITDA marginally lower QoQ. Consolidated EBITDA for the quarter ending December 2023, excluding other income and exceptional income, was marginally down at Rs 111 crore compared to ₹118 crore for the quarter ending September 2023."

The company’s financial performance was impacted by significant losses incurred in select markets in the U.S. and Germany, and both offices are expected to perform better during CY24, leading to positive impact on consolidated EBITDA, the release added.