Fliway Group first-half profit dropped 39 per cent as the impact of a major customer's exit and higher freight costs caused by last November's Kaikoura earthquake weighed on the transport and logistics group.
Net profit fell to $2.2 million, or 4.8 cents per share, in the six months ended December 31, from $3.6m, or 7.9 cents a year earlier, the Auckland-based company said in a statement. Revenue slipped 1.4 per cent to $43.2m as a new customer won in December and upgrades to existing clients bolstered sales in the final month of the period. Profit fell short of Forsyth Barr analyst Andy Bowley's forecast of $3.1m, although revenue exceeded his expectation for sales of $40.5m.
Fliway had previously signalled the lost customer would hit underlying earnings by about 10 per cent and embarked on a cost-cutting exercise last year to offset the impact. While personnel costs fell 4 per cent to $14.5m, disbursement costs were up 3.4 per cent to $12.1m and freight costs jumped 33 per cent to $2.4m.
"Issues additionally impacting the business have been capacity constraints in the transport business unit as a result of internal linehaul equipment availability and the Kaikoura earthquake, which transferred significant rail freight volumes on to road, thereby consuming capacity overflow options over a peak trading period," Fliway said today. "Customer volumes, particularly in the second quarter, exceeded the network capacity in transport."
Fliway's board declared an interim dividend of 2 cents per share, payable on April 20 with a March 31 record date, down from 3.3 cents a year earlier.