BY NKIRUKA NNOROM

A courier firm, Red Star Express plc, is projecting a 36.58 per cent reduction in its earnings for the half year ended 30th June, 2012.

According to its half year projections made available to the investing public through the Nigerian Stock Exchange (NSE), the company said its turnover for the period is expected to hit N1.519 billion.

Compared to N2.395 billion recorded in the half year ending 30th September, 2011, the company would book 36.58 per cent drop in the results.

Similarly, the prfit after tax for the same period is expected to fall by 46.26 per cent to N92.54 million from the previous N172.2 million reported in 2011.

The company, however, recorded improvement in the preceding year as the turnover rose to N2.395 billion in 2011 as against N2.122 billion in 2010, while profit after tax went up to N172.2 million compared with N143.8 million in 2010. The Net Asset Value stood during the period stood at N1.435 million compared with N1.440 million in December 2010.

Meanwhile, Red Star had recently announced that it has expanded its operations into full logistical operations.
To this end, the company has created three new subsidiaries in its chain, in a bid to deliver logistical services in a one-stop-shop platform that would give it an edge above competitors.

Red Star Freight Limited will be responsible for air and sea freighting of private and commercial heavy weights, clearing and forwarding as well as packaging and removal services, while Red Star Logistics is the ground trucking and haulage services arm of the group.

Red Star Support Services, the last subsidiary of the group, will be the outsourcing arm that will provide human capital and facilities for banking, oil and gas and the multinationals.
The decision on the new strategy came after a management retreat, where the company unfolded a five-year strategic plan with a vision to be the logistics company of first choice known for global best practice.

Disclosing the plan during a chat with journalists in Lagos, Sule Bichi, Managing Director of the company said, “Red Star Express seeks to further meet its clients demands and ever-changing needs by setting up subsidiaries to handle the peculiarity of each one of them.

He noted that the human capital resource was being trained to handle its new business, adding that the company will source for more funding in the next five years, though its budget to take care of the current expansion.

According to him, in order align the operations to international standard, the management has put some five-years strategic plans in place, adding, “With a fleet of heavy trucks delivering shipments across the country, we have put the structures in place to offer logistics services the way it’s done in United Sates, in Britain, China, Germany, India, and all other developed countries, with global best practices.”