Logistics Weakness Weighs On Titanium In The First Quarter

Titanium Transportation Group saw its growth slow in the first quarter as a drop in the Canadian firm's logistics business overshadowed gains in trucking.

Titanium's revenue of C$39 million (a Canadian dollar equals US$0.75) and earnings per share of C$0.01 missed analyst expectations of $0.03 cents per share, on revenue of $C45.27 million, in results reported on April 30.  

Revenue dropped by 14.3 percent compared to the first quarter of 2018, while net income declined by more than half, to $0.5 million.

Trucking revenue increased by 7.9 percent to a record $C28.1 million; however, revenue from logistics dropped by more than 40.9 percent, to C$12.1 million. Titanium attributed the drop in logistics revenue to a return to normal market conditions following elevated conditions in the first half of 2018.

"We are pleased with the strong start to 2019 in our Truck Transportation segment, which delivered another record quarter as we continued to build market share," CEO Ted Daniel said in a statement. "After an extraordinary 2018, our logistics segment performance was largely reflective of changing market fundamentals; however, it remained significantly ahead of 2017 results."

Earnings before tax and other expenses, EBITDA, was C$5.4 million in the quarter. Trucking contributed C$4.4 million, a 21.3 percent increase over the first quarter of 2018. EBITDA for logistics was C$0.5 million, a 73 percent drop.

The slower quarter followed record growth in 2018, with revenues increasing by 43 percent. Despite the miss, the company noted that the quarter was the second best in the company's history in terms of revenue and earnings before taxes and other expenses.

The company also provided an update on its forthcoming U.S.-based brokerage, based in Charlotte, North Carolina. Titanium secured a location for the head office during the first quarter and expects it to be operational in the second quarter and contribute to earnings in the fourth quarter of 2019.

Image sourced from Pixabay

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