By Tansy Harcourt
Qube, the part-owner of the nation’s biggest container port operator, Patrick Stevedores, is being threatened with strike action as it revealed a bumper full year profit – thanks to stop-work action that stretched beyond the Christmas period at rival DP World.
Stop-works have already begun at Qube facilities at the Port of Melbourne, and the Maritime Union of Australia has also applied to take industrial action at Brisbane, Adelaide and Port Kembla for shipping products such as cars, steel, fertiliser and grain. The Patrick EBAs for container shipping expire next year.
“They’ve currently got some protected action playing out in Melbourne, which is some work bans,” Qube managing director Paul Digney said, adding it was “not material”.
Qube stevedores earn $128,000 per year on average for a 35-hour week including overtime, according to the company, which offered a 4-5 per cent pay rise each year for the next four years.
The deal has been rejected by the MUA, which pointed to the company’s 32.2 per cent profit surge on the strong result of Patrick, which it owns in a 50/50 joint venture with Canada’s Brookfield.
MUA deputy national secretary Warren Smith said Qube profit has risen 148 per cent over the past four years, executive pay had risen 16 per cent, shareholder dividends rose 75 per cent but “Qube workers’ pay has been diminished by more than 14 per cent against rampant inflation caused by corporate profit gouging”.
“The company increases its prices for clients by the rate of inflation but does not want to share its huge profits with the workforce through a fair pay rise,” Mr Smith said.
Qube benefited from the DP World industrial action because it led to Patrick’s share of the container business rising from 42 per cent to 50 per cent of all containers in Australia.
There was a backlog of more than 50,000 shipping containers at the peak of the dispute, which ended in February with a deal that will see DP World stevedore pay rising from on average $140,000 to about $190,000 a year by 2028.
The extra money Patrick earned from shipping lines that would normally use DP World led to net profit after tax surging 36.9 per cent to $147.6m, according to the financial results of Qube, which booked half of those earnings toward its own NPAT of $221.9m.
Qube warned the 32.2 per cent jump in profit might not be replicated this current year as Patrick’s market share of the container market slipped back down to 42 per cent.
Mr Digney when questioned, said he predicted the industrial action brewing at its ports across the nation was “typical”.
“We’re in the middle of negotiating some of our agreements with the MUA. We’ve got some of our general stevedoring at regional ports and the Patrick’s EA is next year … December 2025.”
Qube shares rose 1.5 per cent to $3.90 on Thursday as investors applauded the strong results across all its units, including Patrick.
Qube is the nation’s biggest import and export logistics provider.
Apart from its shareholding in Patrick, the company’s other unit is its operating division, which comprises logistics and infrastructure mainly relating to containerised cargo and freight forwarding; and ports and bulk, which handles items such as cars and energy.
“Diversification is what’s key for this business,” fund manager Matt Haupt from Wilson Asset Management, which owns Qube shares, said.
“This time Patrick did all the heavy lifting and they flagged that next year might be a bit tougher, but the diversity of this business is one of the best things about it so hopefully some of the other divisions do the heavy lifting,” Mr Haupt added. “It’s a boring business, there’s multiple parts and full credit: they are great operators they tend to pull through every year.”
Mr Digney said company’s grain business was “good at this point in time”.
“There’s a bit of work we’ve done with the grain trading desk to fill our assets, and that started to happen before harvest. So that’s delivering results for us. Across the board in all those other key markets there, they’ve been slightly better than expected.”
Qube announced the purchase of Western Australian Ammonium Nitrate supply chain business Coleman for $119m, to be paid for from existing debt facilities.
The takeover of Coleman, first put up for sale by its founders Robert and Henry Coleman nine years ago for $50m, is not the takeover many in the market had been hoping for, with Qube previously flagging its desire to buy the other half of Patrick it doesn’t already own from Brookfield.
But it does represent an expansion into a new growth area. Coleman supports the Security Sensitive Ammonium Nitrate (SSAN) supply chain in Western Australia.
Ammonia is used for explosives in the mining sector and could play a key role in providing energy because it can be converted into hydrogen, which is easier to ship – though still challenging – than liquid gas.
The acquisition includes $90m-plus of assets including high security storage sheds in the mining centres of Kalgoorlie, Port Hedland, Wyndham, and Kwinana.
SSAN is the predominant explosive and a key input used in the mining of a range of commodities including iron ore, copper, lithium, nickel, zinc, metallurgical coal and thermal coal, as well as by the quarrying industry.
Qube said earnings before interest, tax and amortisation increased 13.6 per cent in 2024 to $318.4m. The company announced a 5.15c-a-share final dividend, up 18 per cent on the previous year.
Licensed by Copyright Agency. You must not copy this work without permission.
