Qube warns on falling productivity

Productivity at Australian ports has gone backwards under the federal government’s industrial relations reforms, according to Qube managing director Paul Digney, who warns that workplace stoppages will escalate unless balance is restored in enterprise bargaining.

Logistics services company Qube workers in action

Productivity at Australian ports has gone backwards under the federal government’s industrial relations reforms, according to Qube managing director Paul Digney, who warns that workplace stoppages will escalate unless balance is restored in enterprise bargaining.

Last month Qube reached an in-principle agreement with the Maritime Union of Australia across 18 ports, following six months of industrial action caused by a breakdown in enterprise bargaining negotiations.

After initially rejecting Qube’s offer of an 18 per cent pay increase over four years for dock workers, the union agreed to an increase that varies across Australian ports, ranging between 18 and 22 per cent.

Speaking to The Australian after handing down the company’s half-year results on Thursday, Mr Digney said that while it was a “good outcome” for workers and the company, the long-running stand-off demonstrated the need for a winding back of the federal government’s industrial relations reforms.

“One of the primary bugbears of all business, big operations or even any company, is productivity,” he said.

“I’m not out on my own – every CEO in the country is saying that productivity has gone backwards. The IR reforms of the current government – if they were to change their ways going forward into the next cycle, or the new government, that would be helpful for business and for supply chains to be as efficient as they can as global trade becomes more difficult. We’ve got to be competitive, especially with our export markets.”

Industry group Shipping Australia is calling for a root-and-branch review of current waterfront workplace laws. It wants shorter, fixed bargaining periods with an automatic referral to the Fair Work Commission, and for the notice period for strike action to be extended from three days to at least 21 days. Qube estimates that the industrial action, which commenced in the middle of 2024, had an earnings impact of $6m-$10m in the six months to December.

However, that was offset by improvements in other parts of Qube’s business, including in agriculture, with bulk exports through Qube’s grain terminals increasing by 85 per cent to 1.2 million tonnes. Overall, underlying earnings were up by 14 per cent in the six months to December to $178.8m, on a 28.4 per cent increase in revenue to $2.09bn. Statutory net profit slipped by 4.4 per cent to $113.4m.

Mr Digney described it as a “very pleasing first half”, despite “multiple headwinds”.

“Our first-half performance again shows our ability to leverage our diversity and use the multiple growth levers at our disposal to navigate headwinds and more than offset earnings impacts from issues that might arise in any one operation or market,” he said.

“That’s evident across the business, where pockets of disruption in some of our key markets or operations during the period, including industrial action at some of our ports, were able to be offset elsewhere, underscoring the resilience of the ­business.”

Qube’s 50 per cent stake in Patrick Stevedores contributed $42.6m in net profit, down from $44.8m. Its market share fell to 42 per cent, compared to 49 per cent in the previous corresponding period, when the company benefited from industrial action at rival DP World.

An internal valuation suggests Qube’s 50 per cent stake in Patrick is worth around $3.3bn.

Qube declared a fully franked interim dividend of 4.1c per share, up from 4c in the previous corresponding period.

The results were broadly in line with analyst expectations.

Qube said it remained confident in delivering growth in full-year earnings, but warned the growth rate would be lower than the previous year.