Qube’s $127.6M Impairment and $62M Cost Provision Hit FY25 Accounts

Background to the Moorebank Adjustments

Qube Holdings Limited has disclosed a series of material accounting adjustments in its preliminary FY25 statutory accounts, primarily linked to its obligations and investments in the Moorebank Logistics Park (MLP) Interstate Rail Terminal. The terminal, a key infrastructure project designed to handle up to 500,000 containers annually, is operated through a joint venture where Qube holds a 65% stake.

The MLP project originated from a 2015 consortium agreement granting a 99-year lease on Commonwealth land for industrial warehousing and rail terminal development. In 2021, Qube monetised the warehousing assets through a $1.67 billion sale to ESR’s LOGOS Consortium but retained responsibility for the rail terminal’s construction and operation.

Significant Non-Cash Impairments and Provisions

Qube’s preliminary assessment anticipates a $127.6 million impairment on its investment in the Moorebank Interstate Terminals Pty Ltd joint venture, effectively writing down the carrying value of its 65% interest to zero. This reflects a subdued medium to long-term volume outlook, with current container throughput remaining very low and no expectation of meaningful recovery.

Additionally, a $29.8 million fair value reduction has been applied to volume-based milestone payments receivable from ESR, which relate to their 25% stake in the joint venture. Both impairments are non-cash and based on discounted cash flow models aligned with the weak demand forecast.

On the cost side, Qube has recognised a $62 million onerous contract provision covering increased expenses to complete Stage 1 of the terminal and associated rail access works. This provision includes Qube’s share and that of its joint venture partners, with cash outflows expected primarily between mid-FY27 and late FY28.

Offsetting Property Sale Profit and Underlying Earnings Outlook

Partially offsetting these charges, Qube reported an $89.7 million profit on the sale of its Minto freehold property during the period, with gross proceeds of $201.7 million received in the second half of FY25.

Importantly, all impairment and provision items will be classified as non-underlying in Qube’s FY25 accounts, consistent with prior practice, given their non-recurring or non-cash nature. The company reaffirmed its guidance that underlying earnings for FY25 are expected to increase by at least 5% compared to FY24.

Looking Ahead

Qube emphasised its ongoing commitment to maximising value from its Moorebank Interstate interest, leaving open the possibility that some impairments could be reversed if conditions improve. The final audited results and detailed disclosures will be released on 21 August 2025, providing further clarity on the financial and operational outlook for this strategically important asset.