Freightways profit drops 25%, scraps final dividend

Freightways chief executive Mark Troughear. Photo / Supplied

Express package and information management company Freightways said its net profit fell by 25 per cent to $47.4 million in the June year and that it would not pay a final dividend due to the uncertainty surrounding the Covid-19 pandemic.

The company paid an interim dividend of 15c early this year. Last year's final dividend came to 15.5c, taking the total dividend for that year to 30.4c.

"Our financial results in FY20 are naturally affected by the lockdowns in both New Zealand and Australia," chief executive Mark Troughear said.

Following the initial drop in activity during lockdowns, Freightways position steadily improved through the lifting of restrictions, although the recovery in Australia had now been affected by the situation in Victoria.

New Zealand had experienced another lockdown, albeit not to the extent of the level 4 lockdown, which restricted our customer activity to only essential services.

The current environment remained "highly uncertain", with a resurgence of Covid-19 across the globe increasing the risk of further trading and travel restrictions.

"The board feels the prudent course of action is to not declare a final dividend for FY20 given the uncertainty in both the NZ and Australian markets," he said.

While recent trading had been strong in New Zealand, Troughear noted that there had been a recent return to level 3 lockdown in Auckland and level 2 nationally along with a continued severe lockdown in Victoria.

Freightways said it was encouraged by strong early trading results consistently achieved in the past few months, "however the economic backdrop to 2021 can best be described as uncertain for all business units in Australia and New Zealand".

By midday, Freightways shares were trading 6c down from Friday's close at $6.97.