QEX - QEX Logistics

[nztx]

So when do we know what the results of "singles week " has been?

Will they be buying tins of white stuff in their singles or by the dozen to store for the future & when they become unsingle
then start multiplying ?

[sb9]

What a shame on the part of Management to issue further cheap options to Chair and other Directors while the company is doldrums and haven't fully come out clean on recent debacle, not a great look on your part Ronnie

[Getty]

With its M C of $18 million is QEX a take over target, Mainfreight, or other companies in the freight business ?

With Qex's demonstrated ability in Warehouse clearance, there will be HUGE demand from freight forwarders and The Warehouse itself.

[Ace]

With Qex's demonstrated ability in Warehouse clearance, there will be HUGE demand from freight forwarders and The Warehouse itself.

Attachment 12117

You think so? Have a look at their reviews and customer service. Disappointing. Google easycom express or qexpress and have a look for yourself at what customers have to say. And ontop of that the issue of shares to directors at this stage? Poor form. Glad I excited. Can’t believe I was a top 10 shareholder in this mess. Already recovering my losses from other businesses with better potential.

[sb9]

Attachment 12117

You think so? Have a look at their reviews and customer service. Disappointing. Google easycom express or qexpress and have a look for yourself at what customers have to say. And ontop of that the issue of shares to directors at this stage? Poor form. Glad I excited. Can’t believe I was a top 10 shareholder in this mess. Already recovering my losses from other businesses with better potential.

Highly questionable and dodgy set of Directors and Management imo.

[kiora]

17-2-18

I wouldn't touch anything C.E . is envolved in with a barge pole.

Rinse and repeat !

[Getty]

With Qex's demonstrated ability in Warehouse clearance, there will be HUGE demand from freight forwarders and The Warehouse itself.

For those that cant see it, my comment was tongue in cheek.
The actual clearance was not an event any s/holder would desire.

[kiora]

For those that cant see it, my comment was tongue in cheek.
The actual clearance was not an event any s/holder would desire.

Whew you had me concerned there !

[Sideshow Bob]

https://www.nzx.com/announcements/364151

QEX Logistics Limited (NZX: QEX)Monday, 30 November 2020NZX LimitedWellingtonTrading result for the six months ended 30 September 2020The Board of QEX Logistics Limited (NZX: QEX) has today announced the unaudited half-yearfinancial results of the business for the six months ended 30 September 2020 (HY2021).

Overview

● COVID-19 related diagou sales decline and changing consumer habits in China affectedrevenue and profit for the six-month period
● The market remains challenging with squeezed margins continuing to create significantpressure across the sector● QEX continues to diversify channels to meet changing consumer purchasing trends in China.Two new channels, livestream and direct-from-warehouse sales were launched and theAustralian international parcels business now operating in trial phase
● Investigations remain ongoing into the missing (and presumed stolen) inventory from theShanghai-based warehouse. QEX continues to work closely with China Customs, authoritiesand a specialist legal team
● It has been determined that the inventory went missing prior to 30 September 2020, which isreflected in the HY2021 results
● Revenue for the period was $19.4 million compared to $27.8 million in the priorcorresponding period. The net loss after tax for the period was $5.9 million which includes a$4.3 million loss before tax relating to the missing inventory. Without the loss of theinventory, the net loss after tax would have been $1.5 million.

Commentary
Market conditions for the first six months of the 2021 financial year were challenging for QEX. Thiswas largely due to the continued impact of COVID-19 which includes the significant reduction indaigou sales due to border closures and changing Chinese consumer purchasing behaviour.Additionally, towards the end of the 2020 financial year (FY20), there was significant stockpiling ofinfant formula in China. While QEX benefited from this increase in sales in FY20, the 2021 financialyear (FY21) commenced with an oversaturation of product in the market. In line with reports fromour sector peers, this is likely to have contributed to the softening of sales early in HY2021.With concerns around COVID-19 being transferred via imported products, the lack of daigoubusiness, lockdown periods and transport challenges, many consumers are preferring to purchasemilk powder products from within China, either directly from bonded warehouses or throughlocal online retailers.

2While the Board’s current position is that the pressures created by COVID-19 are temporary anddiagou trade will eventually return, the entire sector still faces uncertainty about when this willbe. It is expected to continue to impact results until alternative channels are fully established orborders re-open.

As the Board has been communicating for some time, market conditions remain challenging,especially for milk powder, with lower margins continuing to cause pressure right across the sector. The logistics business was impacted in the six months, though not to the same extent asinfant formula. Market prices doubled due to increased airfreight costs, resulting in highermargins on smaller international parcel volumes.These external challenges are expected to continue into the second half, alongside the ongoingimpact created by the $4.3 million of inventory missing (and presumed stolen) from the Shanghaibased warehouse during HY2021.Despite the focus required to manage the Company through these extraordinary externalcircumstances, some progress was made towards the QEX growth strategy in HY2021.

Thisstrategy remains centred on diversification and included the launch of two new sales channelsduring the period.Recently, QEX launched a live streaming sales function, a Chinese e-commerce model that isgaining rapid popularity with Chinese consumers worldwide and in August, direct-fromwarehouse sales were launched in Shanghai.

At the end of HY2021, direct warehouse sales fromShanghai were generating between 5% - 8% of the Company’s milk powder sales.QEX’s Australian operations were fully established in late FY20, with the expectation that profitwould start to be realised in the first half of FY21. Due to the onset of COVID-19 shortly afterhowever, sales have been much lower than forecasted, with Australia delivering $3.5 million in revenue for the six months to 30 September 2020. In late September, the Australian internationalparcels business launched in an initial trial phase for a targeted group of customers.$1.7 million of capital was raised in HY2021 which has, for the most part, been used for workingcapital and supporting the Australian growth strategy.

Financial performance

Total revenue for the six months to 30 September 2020 was $19.4 million compared to $27.8million in the prior corresponding period. Net loss after tax was $5.9 million compared to a netprofit of $0.3 million in the prior corresponding period. This net loss includes the $4.3 millionbefore tax impact from the loss of inventory which it has been determined to have occurredduring the period.

Without the loss of the inventory, our net loss after tax would have been $1.5million.Milk powder sales were $15.8 million, compared to $24.0 million in the prior correspondingperiod. Revenue from international parcel delivery, logistics and customs clearance was $3.5million, compared to $3.7 million in the prior corresponding period.The gross margin % for HY2021 was 4.9%, compared to 10.8% for the same period last year.EBITDA for the six months was a loss of $5.7 million, down $6.6 million compared to a profit of$1.0 million in the previous period.

EBITDA for the current period includes the $4.3 millioninventory loss. Without this loss of inventory, EBITDA would have been a loss of $1.3 million.3The loss of inventory with a value of $4.3 million increased operating expenses by $4.3 million,reducing EBITDA and net profit before tax by the same amount. At this time the Group is onlyrecognising the benefit of tax losses to the extent they can currently be utilised. As a result, taxlosses of $4.0 million, with a tax effect of $1.1 million, have not been recognised in the result forthe period and will be recognised as the Group generates taxable profit in the future.The loss of inventory currently reduces equity and total assets by $4.3 million. This will reduce to a$3.2 million impact as the tax losses are used to offset taxable profit in the future.

At the end of HY2021, working capital was $6.1 million, compared to $10.5 million in the priorcorresponding period. Equity was $7.9 million, compared to $12.3 million in the priorcorresponding period.QEX continues to trade normally and is able to meet customer demand from current inventories.Update regarding missing inventoryIn late October 2020, QEX announced to the market that it was investigating the loss of a quantityof milk powder and infant formula from its leased Chinese Government Customs BondedWarehouse in Shanghai.QEX undertook a thorough assessment of the missing inventory, including a comprehensivereview of purchase and sales transactions throughout the current financial year and concludedthat the value of the missing inventory is $4.3 million. It was determined that the loss of theproduct occurred prior to 30 September 2020 and this is reflected in the HY2021 results.

As a result of the loss of inventory and the financial result for the 6 months to 30 September 2020,QEX’s subsidiary, New Y Trading Limited, which owns the inventory that has beenmisappropriated, and is party to the QEX group of companies’ principal bank funding facility, has,not meet two of its financial covenants comprised within the loan facility documentation. TheCompany’s bank has confirmed with QEX that there will be no change to the existing bankingfacility arrangement. They have also confirmed that the bank will provide a waiver for noncompliance with financial covenants for the quarter ended 30 September 2020.Investigations remain ongoing into the missing product, which is presumed stolen.

QEX is activelypursuing several avenues to determine the exact circumstances leading to, and personsresponsible for, the removal of these goods from the Shanghai premises. This includes workingclosely with China Customs and local authorities. A specialist legal team has been appointed toconduct further investigations. In response to the investigations conducted by QEX, China Customs has informed the Companythat a full audit of custom cleared goods, both into and out of the bonded warehouse will beconducted.The legal team acting for QEX in China continues to explore all available avenues of legal recourseagainst third parties in China in relation to this loss of inventory.

The Company’s previouslycommunicated insurance position remains unchanged at this point in the investigation process,with coverage for the loss incurred unlikely under any policy of insurance.QEX holds adequate inventory levels and this loss has not hindered the Company’s ability toservice all customer ordering requirements, including the recent Double 11 event.

4Outlook QEX continues to face uncertain and unstable sector dynamics arising from COVID-19. The Boardis closely monitoring the ongoing implications and demands of this new environment. These external pressures, alongside the impact of the missing inventory, present a challengingsecond half for QEX which will require significant focus and careful management. Strengthening customer confidence following the inventory loss, and associated adverse media coverage,remains a key priority.Over the coming six months, the Board will continue to assess all opportunities to improve thecurrent financial position of the company and to progress the diversification strategy. The Board thanks our investors and the QEX team for their continued support over an incrediblytough six months ENDS

[sb9]

Absolute shocker of a result!!!