Mohammed Akoojee
Imperial has lost an estimated R4-billion in revenue and R1-billion in operating profit during the peak lockdown period of March to May, says Imperial CEO Mohammed Akoojee.
Despite this, the group still managed to report a 5% increase in continuing revenue for the financial year ended June 30, to R46.4-billion but with continuing operating profit declining by 40%, to R1.5-billion.
July and August have, however, seen an improvement in operating conditions, even if the situation has not yet normalised, says Akoojee.
Effective from July 1, Imperial operates three business: Market Access, Logistics Africa and Logistics International.
Market Access encompasses Imperial’s “Gateway to Africa” strategy, with the group taking ownership of inventory and responsibility for the full order-to-cash function.
The Market Access business currently operates across various regions in Africa, with plans to further expand into additional regions, including South Africa and the Middle East. In fact, the business has already signed it first principal in South Africa.
Market Access (46% of group operating profit) grew revenue by 18% in the year under review, while operating profit decreased by 1%.
Logistics Africa (49% of group operating profit) recorded revenue growth of 3%, but saw a decline in operating profit of 34%. This business experienced a 20% drop in revenue owing to the tobacco and alcohol bans in South Africa, says Akoojee.
Logistics International (5% of group operating profit) was most impacted by Covid-19, with revenue declining by 7% and operating profit by 78% in Euro terms.
Imperial’s automotive operations was heavily impacted in Europe as this sector went into complete lockdown for a prolonged period of time.
Akoojee says Imperial is continuing its transformation from a regional portfolio of businesses to an integrated end-to-end market access and logistics business, with a special focus on being the entry point to Africa.
In order to do this, the group has made four new acquisitions in the Market Access and Logistics Africa businesses, mainly in the healthcare and consumer industries, at around R900-million in value.
The group has also acquired a Turkish air and sea freight forwarding startup, Mex Logistics, to complement its own clearing and forwarding operations. Akoojee says Turkey has well established trade routes into Africa.
Imperial is also looking at expanding into French-speaking Africa, using its well established footprint in West Africa.
Imperial has also appointed a group chief digital officer, and used its $20-million venture fund to conclude three investments, namely in a digital distributor, digital freight forwarder and point-of-care diagnostics enabler.
Digital initiatives underway include a focus on mobile commerce, deriving more value from existing data, digital freight exchanges, and e-commerce and fulfilment.
Akoojee says the initiatives are all to assist Imperial grow in a new-post-Covid-19 world, where it is reshaping itself from being a traditional logistics business.
He notes that Imperial has seen 385 staff, from a staff complement of 25 000 people, test positive for Covid-19, with 11 employees passing away.