Rising Costs and Market Shifts Challenge CTI Logistics’ Transport Segment

FY25 Financial Performance

CTI Logistics Limited (ASX, CLX) delivered a steady financial performance for the fiscal year ending June 30, 2025, with revenue edging up 1.3% to $325.4 million and EBITDA rising 5.3% to $58.9 million. Despite a slight dip in profit before tax, largely due to increased depreciation and interest expenses linked to property leases, the company maintained robust cash flow and a disciplined capital structure, with gearing held at a conservative 25%.

Strategic Property Investments Drive Value

A standout feature of CTI’s FY25 results is the substantial uplift in its property portfolio valuation. Independent assessments valued owned properties at $176 million, a $64 million increase over the carrying value. This surge is largely attributed to the near completion of the Hazelmere WA development, a strategic 150,000 square metre logistics hub expected to be fully operational by September 2025. This property not only enhances operational capacity but also provides a stable income stream through internal rentals, effectively hedging rising costs in transport and logistics segments.

Operational Highlights and Segment Performance

The transport segment faced headwinds with a 2.4% revenue decline, reflecting lower express freight volumes and a market shift from express to general freight services. However, investments in fleet upgrades and transport management systems have improved reliability and cost efficiency. Conversely, the logistics segment showed strong momentum, with revenue growth of 7.4%, driven by increased utilisation of expanded warehousing facilities and the onboarding of new customers, notably within GMK Flooring Logistics’ national expansion.

Capital Allocation and Growth Outlook

CTI invested $34.1 million in capital expenditure during FY25, focusing on property development, fleet renewal, and operational enhancements. With the Hazelmere project nearing completion, capital spending is expected to normalize to around $12 million in FY26. The company’s strong balance sheet, supported by property-backed debt facilities and available cash reserves, positions it well to pursue organic growth and selective acquisitions amid a consolidating freight market. Management remains cautiously optimistic, noting ongoing cost pressures such as fuel price volatility and moderated labour inflation, but anticipates earnings growth driven by expanded capacity and operational efficiencies.

Positioning for Sustainable Growth

CTI Logistics is leveraging its diversified business model, combining transport, logistics, and property assets to build resilience across market cycles. The company’s strategic property holdings underpin its national expansion ambitions, while investments in technology and fleet modernization aim to enhance service quality and cost competitiveness. With a pipeline of growth opportunities and a focus on disciplined capital allocation, CTI is well placed to capitalize on Australia’s growing regional development and e-commerce trends.