A year after its backdoor listing, TIL Logistics has renewed the third of three contracts billed as risks to its financial performance.
The third long-term contract with the Farmlands Cooperative.
“The renewed contract covers the North and South Islands and includes fuel transport to all Farmlands Fuel customers, including the Challenge petrol station network,” the transport and logistics company says.
The Farmlands contract with TIL subsidiary Pacific Fuel Haul was the second largest while both the first and third largest contracts were both with the nation’s largest petrol station operator, Z Energy, (the third largest was with the Z-owned Caltex network) and both were renewed in July.
All three contracts were renewed after a competitive tender process.
“We are delighted that Farmlands recognise the value in our service and relationship and look forward to our continuing partnership with them,” says TIL chief executive Alan Pearson in a statement.
TIL’s listing profile said its top three contracts represented about 80 percent of Pacific Fuel Haul’s revenue in the year ended June 2017 and about 18 percent of TIL’s total revenue.
Farmlands owns an 82-store network and had $2.4 billion in revenue in the year ended June 2018.
While the latest contract signing significantly de-risks TIL’s business, the company’s first year as a listed company disappointed when it missed its earnings before interest, tax, depreciation and amortisation forecast for the year ended June by $2 million, posting a $26.2 million result.
It blamed the miss on a variety of factors including rising fuel costs and road closures due to bad weather.
The shares last traded at $1.50, and have dropped 32 percent so far this year.