OneLogix : Interim Results November 2021

WORLD-CLASS

LOGISTICS & SUPPLY

CHAIN SOLUTIONS

CONDENSED UNAUDITED

CONSOLIDATED RESULTS

for the six months ended 30 November 2021

OneLogix Group Limited (Incorporated in the Republic of South Africa)  (Registration number 1998/004519/06 JSE share code: OLG  ISIN: ZAE000026399  ("OneLogix" or "the company" or "the group")

Revenue up 21% to R1,49 billion

EBITDA* up 14% to R213,7 million

EPS down 75% to 2,5 cps

HEPS down 89% to 1,1 cps

Core HEPS down 82% to 2,1 cps

NAV down 1% to 408,7 cps

NTAV down 2% to 337,7 cps

No dividend declared

SALIENT FEATURES

*  Calculated as operating profit plus depreciation and amortisation, hail damage claim costs, prior period retrenchment costs less profit on disposal of property, plant and equipment.

COMMENTARY

As detailed in the trading statement published on 6 December 2021, the group has experienced a challenging six months ended 30 November 2021 ("the period").

Our automotive logistics businesses continue to be hamstrung by depressed storage volumes due to global supply chain disruptions impacting the supply and delivery of passenger and commercial vehicles. In addition, the on-boarding of additional vehicle storage facilities as part of the third phase of the Umlaas Road logistics hub "Umlaas Road Phase 3" in January 2021 contributed to an additional R32 million in lease-related costs in the period compared to the prior period.

Notwithstanding this, some of the 13 group companies performed better than expected during the period. Each business remains well positioned and inherently relevant with a strong business strategy, skilful, resilient and innovative management teams together with a strong customer base that will ensure their sustainability. Recent restructuring and productivity interventions at OneLogix United Bulk ("UB") have been successful and have stimulated further innovative initiatives throughout the group.

Review of operations

Abnormal Logistics

Despite the constraints on the vehicle component OneLogix VDS and OneLogix Trucklogix traded as well as could be expected. OneLogix Projex traded satisfactorily in a difficult market and OneLogix Agritrans, the new and well-integrated acquisition concluded in the second half of the prior year, contributed to group earnings for the first time.

Primary Product Logistics

This segment traded well. The turnaround at OneLogix UB has been successful and OneLogix UB Cryogas traded well in an unsettled Covid-19 induced oxygen market. OneLogix Jackson and OneLogix Linehaul again performed pleasingly, while OneLogix Buffelshoek is emerging as a stronger entity after management changes and concomitant productivity improvements.

Other Logistics Services

This smaller, non-reportable segment continued its strong performance with particularly pleasing results from truck repairer Atlas 360 and the clearing and forwarding company, OneLogix Cargo Solutions.

Financial results

Revenue increased by 21% from R1,22 billion to R1,49 billion. Revenue increases were experienced across all the group's operations and returned to similar levels as pre-pandemic.Cross-border transport volumes recovered strongly in the period increasing 29% from the prior period to R299,8 million. An increase in the average fuel price for the period of 24% resulted in an increased fuel-spend recovery in the top line of around R70 million.

Earnings before taxation, depreciation and amortisation* ("EBITDA") increased by 14% from R187 million to R213,7 million. This is encouraging considering the significant cost control measures and once-off staff cost savings implemented during the prior period. As a result, EBITDA margins remained resilient at 15,1% compared to 15,3% in the prior period, excluding the additional fuel cost recovered in revenue of R70 million from both revenue and operating costs to enable a more meaningful comparison.

Trading profit was up 17% from R84,7 million to R98,8 million, notwithstanding an increased depreciation and amortisation charge of 12% mainly due to the Umlaas Road Phase 3 coming into operation at the beginning of the second half of the prior year. Consequently, trading margins decreased slightly from 7,3% to 7,0% on the basis of the exclusion of the R70 million additional fuel charge from both revenue and operating costs.

OneLogix Condensed unaudited consolidated results for the six months ended 30 November 2021 1

COMMENTARY (continued)

The group experienced a freak hailstorm in September 2021 which caused considerable damage to passenger vehicles stored at the group's Umlaas Road facility. The group warehouses a particularly large quantum of vehicles and the current insurance cover available is only for significant damage to passenger vehicles, requiring the group to carry the risk for all minor repairs. At the time the hailstorm hit, we were unfortunately processing a few large shipments of passenger vehicles into the Umlaas Road open staging facility, resulting in an estimated cost to the group, net of insurance proceeds of R25 million. The exercise in repairing and finalising the claims with insurers is ongoing and expected to be completed before the end of February 2022.

Another contributing factor was the civil unrest which as previously communicated resulted in the group experiencing greatly reduced activity for approximately two weeks ending on 19 July 2021. The productivity lost over the period of the unrest as well as costs incurred to secure our operations resulted in a decline in revenue and profitability of an estimated R20 million and R10 million, respectively. The arson and looting associated with the civil unrest resulted in the group losing four fully loaded general freight vehicles in the OneLogix Projex business. The remaining fleet and other assets, principally the Umlaas Road development, were unaffected. The group is comprehensively insured including SA Special Risk Insurance Assurance ("SASRIA") cover in respect of damage to assets and the settling of the claim is at an advanced stage. No financial losses are expected on the settlement of these claims. Thankfully no staff were physically injured despite some being subjected to harrowing ordeals.

OneLogix VDS and OneLogix TruckLogix continue to be hamstrung by depressed storage volumes resulting from global supply chain disruptions impacting the supply and delivery of passenger and commercial vehicles. This has been compounded by the on-boarding of our additional vehicle storage facilities in KwaZulu-Natal (upon the completion of the new Umlaas Road Phase 3 storage facilities in January 2021) contributing to an additional R32 million in lease- related costs as per IFRS 16 in the period compared to the prior period.

Once-off retrenchment costs of R8,8 million were incurred during the prior period. Retrenchment costs where predominantly incurred in the OneLogix VDS business within the Abnormal Logistics segment.

Due to the prevailing share price, no equity-settledshare-based charges were incurred during the period or prior period.

Operating profit, excluding capital items, remained flat at R70,3 million from R71,2 million after including the hail damage claim costs incurred in the period offset by retrenchment costs incurred in the prior period.

Net finance costs of R50,1 million were significantly higher compared to the prior period, primarily due to the additional finance costs incurred during the period related to Umlaas Road Phase 3 becoming operational. An interest cover on EBITDA of 4,5 times (May 2021: 5,5 times) remains well within our targeted range.

The recent share repurchases effected in the second half of the prior year have resulted in a weighted average of 223 920 689 shares in issue for the period, which is 2% less than in the prior period.

The combined effects of the above and an increase in non-controlling interest share of profits by 68% from R7,9 million to R13,3 million have contributed to earnings per share ("EPS") decreasing by 75%, or 7,5 cents, to 2,5 cents.

Headline earnings per share ("HEPS") of 1,1 cents was 89% lower given a swing from an attributable loss on disposal of fleet of R0,4 million in the prior period, to an attributable profit on disposal of fleet of R3,1 million in the period under review.

Core HEPS, the earnings metric used by management to measure operational performance, decreased by 82% to 2,1 cents, as the amortisation charge of intangible assets recognised on business combinations was less than last period due.

There was no dilutionary effect on EPS, HEPS or Core HEPS in the period as the volume weighted average share price for the period was below the consideration due from the employee participation schemes (to which potential dilution in issued ordinary shares relates). A reconciliation of headline earnings to core headline earnings is provided in the financial results below.

2 OneLogix Condensed unaudited consolidated results for the six months ended 30 November 2021

Cash generated from operations before net working capital inflows, net finance costs, taxation, and dividends, remained resilient with a 5% increase to R188,6 million. The net working capital inflows of R103,5 million were principally due to the continued expansion of the clearing and forwarding offering within the group.

The group invested R96,8 million in owned operational infrastructure during the period as follows: R73,1 million in fleet (of which R66,3 million relates to expansion); R7,9 million in IT-related assets; R7,3 million in property and R8,5 million for other assets. Assets, mainly trucks, with a carrying value of R21,2 were disposed of for proceeds of R27,3 million due to the buoyant second-hand market for commercial vehicles on the back of supply constraints for new vehicles.

All material owned properties were revalued during the period as part of a financing project. The Pomona properties, predominantly being passenger vehicle storage yards, have been particularly affected by the reduced storage volumes highlighted above. Rental income vacancy rates were adjusted whereas capitalisation rates remained unchanged. The other group properties are typically operational properties with no indicators of impairments. The revised valuation of the Pomona properties has resulted in a R20 million reversal, R15,5 million after taxation reduction to the revaluation reserve, of cumulative prior years' upward revaluations.

Interest-bearing borrowings increased to R215,8 million at 30 November 2021 (31 May 2021: R201,2 million) mainly due to trailer fleet expansion during the period at OneLogix UB, Linehaul and Jackson.

The carrying value of interest-bearing debt is covered 3,8 times (May 2021: 4,1 times) by the carrying value of property, plant and equipment. The slight decrease in cover is due to the increased fleet investment in the period and the R20 million reversal in revaluation of the Pomona properties. The entire amount of interest-bearing debt is related to tangible asset- based finance.

Lease liabilities increased slightly to R793,1 million at 30 November 2021 (31 May 2021: R784,1 million) mainly due to the ongoing model to utilise truck tractors on a leased structure rather than outright ownership. Lease liabilities relating to property was R517,8 million (of which R450,8 million relates to the Umlaas Road property) and the balance of R275,3 million relates to truck tractors.

Interest-bearing borrowings and lease repayment profiles returned to normal in the period as payment restructures put in place with certain lenders and lessors in the prior period, due to Covid-19-related lockdown conditions at the time, were not necessary as trading conditions returned to normal.

Net cash resources at the reporting date amounted to R524,5 million (May 2021: R417,7 million). Included in cash resources

at 30 November 2021 is R188,5 million (May 2021: R97,4 million) related to prepayments received from customers for clearing and forwarding transactions that are settled with the South African Revenue Service in the following month. Significant increases in trading activity, particularly in the latter part of the period, together with increased clearing and forwarding activity have resulted in significant increases in carrying values of trade receivables and trade payables. Collections of trade receivables remain within target and there was no requirement to adjust the expected credit loss ratio based on external and internal considerations.

The group's financial position and the resources available have successfully reinforced a solid platform to enable the group to navigate the prevailing uncertain trading environment and allow the group to take advantage of any growth opportunities should they arise.

Going concern

In addressing the group's going concern, the board of directors ("the board") confirm that:

The approved budget for the 2022 financial year was prepared with due consideration given to the expected impact of the Covid-19 pandemic trading environment and the interim period's performance is largely in line with budget after excluding the impact of the hail damage and the civil unrest;

All existing debt covenants with lenders are being met and are forecasted to be met; and

The group has sufficient access to asset-based and overdraft facilities or executable liquidity events (primarily the sale of non-core assets), to fund repayment of debt obligations should the need arise.

OneLogix Condensed unaudited consolidated results for the six months ended 30 November 2021 3