Mainfreight dips toes into Chile

Mainfreight bought Netherlands-based transport firm Wim Bosman Group this year. Photo / Supplied

Mainfreight has set up a Latin American branch, bringing it one step closer to its goal of becoming a global logistics player.

Managing director Don Braid said the newly opened branch of CaroTrans - a wholly owned subsidiary - in Santiago, Chile, allowed the New Zealand firm its first foray into the South American market.

CaroTrans provides container shipping services between the United States and 140 countries.

Mainfreight now has a foothold in every populated continent, apart from Africa, and Braid said more expansion lay ahead.

"I think there's a long way to go to become something of significance but we've got a footprint around the world now, it's a defining time for Mainfreight," he said.

Many companies struggle with the sluggish trading environment but the Auckland-based company is bucking the trend.

Mainfreight's full-year result yesterday reported strong revenue growth across all divisions, in this country and the US, group sales rising 18 per cent to $1.34 billion.

Profit before non-recurring expenses - resulting from the Government's removal of depreciation write-offs on buildings in 2010 and the one-off costs of a recent acquisition - was a record $47.2 million.

Group earnings before interest, taxation, depreciation and amortisation (ebitda) of $91.5 million were the company's best result. Shares closed up 18c at $9.44 last night.

Braid said that bureaucrats with no idea about business had made an "absurd decision" in removing the write-offs
for building depreciation.

Changes to international accounting rules required a deferred tax liability for tax depreciation to be accounted for in the bottom-line, the company said, causing declared net profit to fall 29 per cent on the previous year's result to $25.7 million.

Braid said the company had worked hard to differentiate itself in the domestic marketplace, where sales rose 8.7 per cent to $290.7 million in the year to March, making up about 20 per cent of group revenue.

The firm's US presence was still relatively small but it was using "Mainfreight disciplines to grow our sales and offer better services to customers", he said.

Combined US revenues for Mainfreight and CaroTrans increased 25 per cent on the previous year to $420.4 million, while ebitda rose 101 per cent to $14.6 million.

Braid said the company was making progress on "embedding" its latest acquisition - Netherlands-based Wim Bosman Group - into the firm.

Directors approved a dividend of 11c a share, to be paid on July 11, taking the full dividend for the year to 20c a share.