Gefco reports strong Q1 with 9% revenue growth

Margins improved thanks to automotive logistics specialist’s renegotiated contract with core customer PSA, but group also recorded 14.5% rise in non-PSA sales.

Automotive logistics specialist Gefco has reported first-quarter consolidated revenues of €1.24 billion, a rise of 9% on a like-for-like basis compared to the same period last year.

Growth was underpinned by several factors including a “good performance” with its core customer, the French automobile manufacturer Groupe PSA, mainly in Europe and especially with its Opel Vauxhall unit, following a newly-renegotiated contract that started on 1 January 2019. The “strong increase” recorded in recurring EBIT and the improvement in margins recorded during the quarter, compared to Q1 2018, can be mainly attributed to this contract, the group noted.

Gefco also recorded a 14.5% like-for-like rise in ‘Market Clients’ (non-Groupe PSA) sales, which now account for 46.5% of the group’s total revenues.

However, lower volumes were recorded by Gefco’s Air & Sea division compared to Q1 2018, the group said. Nevertheless, the quarter saw the division begin a partnership with BP for multimodal transport to CIS countries. GEFCO has also extended its contract with ESKA Packaging Netherlands for Air and Sea services.

Commenting on the results, Gefco’s chairman Luc Nadal said: “I am very pleased with our Q1 performance. We continue to outperform our underlying market. We keep creating value for Groupe PSA.”

He added: “Market Clients sales kept growing steadily, particularly within Finished Vehicles Logistics (FVL) and Overland & Contract Logistics.”

He said the joint-venture with Bergé in the automotive logistics segment in Spain, which took effect at the start of the year, had got off to “an excellent start.”

Nadal added: “All in all, I remain very confident that we will achieve our operational and financial targets for the full-year 2019 and our 2020-2021 guidance.”

GEFCO described its commercial development as “robust” in Q1 with several new major contracts and the renewal of its business “with a number of tier-one auto and non-auto customers around the world” in both FVL and Overland & Contract Logistics.

At the start of the year, GEFCO s postponed its initial public offering (IPO) for an indefinite period supposedly as a result of an unfavourable investment climate on stock markets.

The IPO had focused on the reduction of the 75% stake in GEFCO owned by Russian Railways (RZD) to below 50%, subject to the approval of the Russian Federation, with Groupe PSA also intending to decrease its shareholding of almost 25% to below 10% – its remaining stake being subject to a two-year lock-up period.

Source: Lloyd’s