Super Group, which reported double-digit half-year revenues and profits, says the Maputo corridor has been its saving grace amid unrelenting challenges and delays on the SA coal corridors and ports.
This comes as the logistics, fleet and dealership company on Tuesday reported growth across all its business units for the first time in a decade, driven by strong consumer supply chain and commodity transport performances in Southern Africa, higher average revenues per load in Europe, and the consolidation of the full six months financial results for LeasePlan in Australia.
Super Group bought the LeasePlan Australia and New Zealand operations for R4.41bn last year, giving it a substantial presence in the region’s fleet management and leasing services market.
CEO Peter Mountford told Business Day on Tuesday after the release of results for the six months to end-December that transporting commodities via road down to Richards Bay or Durban owing to the devastation of the country’s rail system had become an expensive and gruelling task, while delays at the Beitbridge border post into Zimbabwe remained a problem.
“The corridor down to Durban is problematic and it’s a huge disappointment for us to see the disruptions going on in the Richards Bay coal line because that is a critical national asset, and it’s the right route for a lot of our coal exports,” Mountford said.
“The Maputo corridor in terms of road transport of coal on the export side is the only corridor that we realistically can use,” he said, adding that coal could not be hauled by road from areas such as Witbank to Richards Bay or Durban as “it’s just too far and the coal commodity prices can’t sustain that”.
The corridor has become a preferred route for SA’s logistics companies because SA’s own exporting infrastructure is plagued by disruptions. Though there are challenges there too, Mountford said, the corridor was far better performing for the group, which provides the hauling of dry bulk goods such as coal and chrome.
“So the export volumes we are doing out through Maputo [makes it] by far our preferred route, irrespective of disruptions, and is our only sensible, economic and viable route,” he said.
“Of course, you’ve got to watch that corridor carefully in terms of trucks, safety and security of trucks, which we look at very carefully in terms of providing convoys and support for our trucks going across the border into Mozambique.”
For the period, the group said headline earnings per share — the primary of measure of profit — rose 30.1% to 248.3c, while operating profit improved by 26.1% to R2bn from R1.59bn in the prior comparative period.
Mountford said implementing a series of belt-tightening exercises had assisted the group in shoring up the performance of every single business unit that in the period generated returns exceeding the weighted average cost of capital.
“We’ve put massive emphasis on our cost structures and we really have rationalised, reorganised across our German operations and across dealerships in SA and the like, that all manifested in the really strong set of results.”
In Germany, the group rationalised its branch network and closed smaller branches while consolidating in its bigger regions. Mountford said this included spending money on technology and on the automation of many of the company’s functionalities with the help of artificial intelligence and blockchain-type solutions.
As part of its diversification strategy, its SA dealerships unit has moved towards a multibrand dealership model where many of its dealerships have converted into two or three major brands in some cases.
This way “you can get a better recovery on your property investment”, Mountford added.
Despite continuing shortages of new vehicle stock amid the unabated semiconductor shortage, dealerships in SA and the UK both outperformed the market in terms of their sales performance and reported a “notable increase” in new car sales volumes.
Super Group’s share price rose 2.01% to R33 on Tuesday, having risen over 22% since the start of the year.
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