CTI Logistics Limited trading update

CTI Logistics Limited (ASX: $CLX) has announced an expected 30% decrease in profit before tax for the half year ending 31 December 2023 compared to the same period in 2022. The company attributes this decline to the normalization of customer supply chains, reduced demand for premium freight services, and inflationary pressures impacting profit margins.

Executive commentary on trading update

The current half year reporting period has presented challenges due to the normalization of customer supply chains, resulting in decreased demand for premium freight services. Additionally, inflationary pressures, including increased supply-side costs such as wage rate rises, subcontractor costs, property and insurance costs, and rising interest rates, have impacted profit margins. These factors may continue to affect trading volumes and activity in the second half of the financial year to 30 June 2024. Despite these challenges, the company remains focused on generating strong cash flow and completing the development of the remaining land at Hazelmere in Western Australia.

Summary of trading update and outlook

CTI Logistics Limited anticipates a 30% decrease in profit before tax for the half year ending 31 December 2023, primarily due to the normalization of customer supply chains and inflationary pressures impacting profit margins. The company plans to release the financial results for this period in February 2024. Looking ahead, CTI Logistics aims to address the challenges posed by supply chain normalization and inflationary pressures, focusing on generating strong cash flow and completing the development of the remaining land at Hazelmere in Western Australia.