Mainfreight profits surge 27pc on offshore sales

Photo / Sarah Ivey

Mainfreight reported a 27.1 per cent rise in its net surplus before abnormals to $34.6 million for the nine months to December, as third quarter trading maintained improvements seen during the first half.

The freight and logistics company said revenue rose 20.1 per cent from a year earlier to $1.01 billion, with offshore sales continuing to account for 70 per cent of the total, Mainfreight said today.

Trading through the third quarter maintained improvements seen in the first half. Early fourth quarter trading had been difficult to measure, but the company said it remained confident the improvements and levels of trading would continue through to year end.

A much improved year end result was expected before abnormals, which would include the non-recurring, non-cash deferred tax expense triggered by government legislation.

The result included a bonus accrual of $7.8m which was excluded in last year's comparative figures due to a suspension of bonus payments.

In the New Zealand domestic division earnings before interest, tax, depreciation and amortisation (ebitda) rose 7.3 per cent to $30.7m, including bonus accruals.

Sales were up 8.7 per cent to $219.5m, with freight volumes leading into Christmas relatively strong, consistent with past years. Market share increases helped growth, the company said.

Logistics volumes were weaker as stock holdings from customers were limited to "just in time" levels. Transport volumes remained satisfactory during January and into February.

In the New Zealand international division ebitda rose 13.8 per cent to $3.9m, with revenue up 16.6 per cent to $91.2m.

Volumes for both export and import were satisfactory through into December, while export volumes had strengthened ahead of imports in January and February, Mainfreight said.

In the Australian domestic division, ebitda for the nine month period rose 11.8 per cent from a year earlier to $13.2m, with sales up 17.4 per cent to $169.4m.

Australian freight volumes were satisfactory through the third quarter and had remained consistent into January and February.

While climatic conditions had short term effects on freight movement, particularly in Queensland, it was expected volumes would increase into that region as repairs and stock replacement got under way, Mainfreight said.

The Australia international division had a 0.4 per cent decline in ebitda to $5.9m, with sales up 24.3 per cent to $186.3m.

Gross margins remained under pressure as international freight rates continued to fluctuate through supply and demand activity particularly in the import trade. Margin management remained a key area for improvement.

In the United States, trading conditions continued to improve for both the company's operations, and while they were still far from satisfactory, Mainfreight remained confident of its long term objectives in the market.

Total sales for the US operations was up 27.4 per cent to $316.2m, with ebitda up 93.2 per cent to $10.6m.

In Asia, continuing growth within the region helped the company lift revenue 47.6 per cent to $29.4m, while ebitda rose 72.5 per cent to $2.7m.

Asia export volumes remain strong, in particular with market increases in airfreight, Mainfreight said.

Progress continued on the company's European and South American expansion plans.

- NZPA