Fliway warns loss of major customer will hurt 2017 earnings

By Tina Morrison

Fliway has lost a big customer - one that accounts for 10pc of its earnings.
Fliway has lost a big customer - one that accounts for 10pc of its earnings.

Fliway, the listed transport and logistics group, expects the loss of a large customer will hurt revenue and earnings next financial year.

The customer, which Fliway didn't name, is consolidating its transport and logistics business with a rival following a competitive tender process, Auckland-based Fliway said in a statement.

The customer contributes between 4 and 5 per cent of Fliway's total revenue and will likely make up about 10 per cent of Fliway's earnings before interest, tax, depreciation and amortisation in the year ending June 30, 2016, the company said. The work is expected to transition from August 2016.

"This is a material customer for Fliway and, while there will be no impact on the FY16 results for the 12 months ended 30 June 2016, at this stage there is expected to be a significant impact on the FY17 revenue and earnings as a result of this customer loss," Fliway said.

"Targeted areas of cost reduction will be considered in order to minimise the financial impact of this customer loss, but only where there is no impact to service for our customers."

The company said it's "very disappointed" to have not been retained the business, and will continue seeking to win contracts with new customers.

Fliway transports and warehouses freight throughout New Zealand and coordinates freight movements internationally, including customs clearance. It has 400 staff, 170 vehicles in its fleet, and 15 sites nationwide. It also owns half of UPS-Fliway, a joint venture its had for the past 17 years with UPS, one of the world's largest package delivery companies.

It will publish earnings for the year through June in late August.

Its stock last traded at $1.08, after being sold at $1.20 in an initial public offering in April last year.

- BusinessDesk

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