TRANSPACIFIC Industries Group (ASX:TPI) boosted half-year statutory profit after tax to $158.6 million for the six months ended December 31, up from $32.3 million the previous corresponding period, it announced today.
The sale of a number of significant items, worth $116.9 million, is the major component which pushed the the profit increase. The major divestment was the Commercial Vehicles Group in August.
Underlying net profit under income tax attributable to ordinary equity holders was $41.7 million, an increase of 16.5 per cent over the previous corresponding period.
Underlying EBITDA of $195.1 million was down 7.7 per cent mainly due to the divestment of the Commercial Vehicles Group.
Debt was reduced by $266 million, with net debt reduced to $754 million at December 31 while $290 million of syndicated debt was refinanced with improved pricing.
The debt repayments have saved the business $19.5 million, or a 31 per cent reduction in underlying net interest expense, and that saving will grow to $35 million for the full financial year.
Meanwhile, 31 non-core and underperforming branches have been closed, sold or are contracted for sale, and there are plans to divest another 11.
Robert Boucher, the recently appointed Chief Executive Officer of Transpacific says conditions were subdued over the past six months and the result can be improved.
"Transpacific has the elements to prosper and grow: the personnel, the assets and well-positioned businesses," he says.
Thinking on the divestment of the New Zealand waste assets is well advanced and Boucher is striving to make the business more cost-effective. A total of $11 million in cost reductions were made this half.
"We have started to implement a number of the efficiency initiatives identified as part of our transformation program to streamline and improve the business, and I will continue to drive those changes," he says.
"I have restructured and increased the bench strength of the leadership team to better support our frontline operations.
During 2014 I will also be consolidating our senior operational and functional management in Melbourne which I see as an important step in ensuring the leadership of the Company is focused on our customers."
Boucher says conditions will remain constistent for the second half of FY14.
TPI is trading at $1.167, up 1.92 per cent.
*Please note: Transpacific Industries Group (ASX:TPI) completed a changed of name to Cleanaway Waste Management (ASX:CWY) on July 1, 2016
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