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Trading update relating to the impact of Covid-19 on operations
Imperial Logistics Limited
(Incorporated in the Republic of South Africa)
Registration number: 1946/021048/06
ISIN: ZAE000067211
Share code: IPL
(“Imperial” or “Company” or “Group”)
Trading update relating to the impact of Covid-19 on operations
As shareholders are aware, the Covid-19 pandemic continues to spread,
and these trying times come with a high degree of uncertainty, fluidity
and unexpected challenges. With Imperial’s operations in over 32
countries, including those that are being severely impacted by the
virus with various restrictive measures imposed, we believe it
necessary to provide shareholders with an update on the current state
of our operations at this time.
Imperial is essential to the sourcing, warehousing, transportation
and distribution of medication and other medical supplies, food, basic
goods, and other essential products and services in our markets of
operation:
- In South Africa, we provide an essential service of distributing
consumer goods and healthcare (medication), and therefore, a
significant part of this business remains in operation during
the lockdown period. Approximately 55% of our revenue in this
division is generated from the consumer, healthcare and other
essential products and services sectors in South Africa.
- The African Regions division is mainly engaged in healthcare
and consumer goods distribution. While there are some concerns
relating to the supply and the delivery of products in certain
markets, most of the businesses in this division continue to
operate at this time, with sufficient stock on hand. Close to
100% of our revenue in this division is generated from the
healthcare and consumer industries.
- In the International division, the automotive contract
logistics and related transport businesses are most impacted
as all OEMs have implemented plant shut-downs (c. 36% of
revenue in this division is generated from the automotive
industry). At this stage, volumes in our chemicals and related
shipping businesses remain resilient (c.31% of revenue in this
division is generated from the chemical industry). Other
businesses within this division are still operational,
although volumes are being negatively impacted in some
instances.
At this stage, Imperial has adequate headroom in terms of debt
covenants and liquidity. Stringent, proactive measures have been
implemented across the business to manage costs, and optimise
working capital and capital expenditure, with a stronger focus on
cash flow generation during these uncertain times.
However, given the increasing uncertainty and volatility that its
markets are currently faced with, Imperial thinks it prudent to
withdraw its current guidance for the year to 30 June 2020, which
was communicated to the market on 25 February 2020. Updated guidance
will be provided to the market once there is more certainty on the
outlook.
Imperial plays a critical role in the supply of essential services
and products in the many countries in which it operates. We remain
fully committed to preventing the spread of the COVID-19 virus, with
stringent workplace measures currently in place; further measures
will be implemented as required.
Ensuring the safety of our staff, families and communities, and
delivering our service to our clients, businesses and countries that
we serve, remain key priorities. As Imperial, we will continue to
support all our key stakeholders and countries of operation through
our best endeavours in ensuring that the impacts on supply chains
are minimal.
Bedfordview
7 April 2020
Sponsor: Merrill Lynch South Africa (Pty) Limited
Date: 07-04-2020 09:00:00
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