Strong third quarter for Mainfreight

A strong third quarter saw freight firm Mainfreight today report a net profit of $20.27 million for the nine months to December 31, up from $7.66 million a year earlier.

The company had earned $10m in the third quarter.

Earnings before interest and tax (ebit) rose to $33.2m from $18.8m, with the third quarter contributing $15.6m.

Consolidated revenues increased 1 per cent to $680m from $671m. Excluding divested business units of Owens and foreign exchange, the increase was 9.3 per cent.

Managing director Don Braid said the improved group performance followed the trends from the previous quarters and "will continue in the fourth quarter".

"Performance to the year end March 2006 is expected to reflect this current growth and the company remains positive for the 2007 financial year," Mr Braid said.

All divisions contributed positively to the result, he said, noting the December quarter was traditionally the strongest for the group.

He said the growing importance of international expansion was demonstrated by figures showing the overseas proportion of net surplus had grown from 24.3 per cent to 41.1 per cent.

Ebit for the New Zealand domestic division rose 15 per cent to $18.1m with improved results from Owens Transport. Domestic revenue rose 2 per cent to $203.9m.

Domestic tonnages were flattening out but Mr Braid noted that the previous year was an extraordinarily strong one.

"Our expansion into Australia, America and China is provided us with valuable profits right now and those economies are continuing to have a good amount of growth in them, particularly Australia."

He said there was plenty of growth opportunity in Australia, where Mainfreight's market share was small.

New Zealand International ebit improved 29 per cent to $2.1m with revenue slightly down at $109m.

Australian domestic ebit rose from $0.3m to $3.3m with revenue up 12 per cent to $8.3m.

Australia international ebit rose 69 per cent to $8m, with revenue up 15 per cent to $223m.

"Ongoing business confidence within Australia continues to assist all of our Australian divisions and is continuing strongly through the fourth quarter," Mr Braid said.

US International ebit rose 110 per cent to $2.2m, with revenue up 14 per cent to $65.8m.

Group operating cash flows were $29.3m against $1.5m in the year ago period. Last year's results included large restructuring costs and working capital requirements for the Owens businesses.

Mainfreight shares closed yesterday on a record high of $3.90, up from $2.60 a year ago.

- NZPA