ERoad, the logistics and fleet management company, turned to a first-half loss even as revenue rose.

While it expects strong growth in New Zealand, growth in the US will be modest, the Auckland-based company said.

It posted a net loss of $408,452 in the six months ended September 30, from a $611,000 profit a year earlier. Revenue rose 27 percent to $15.5 million, while earnings before interest, tax, depreciation and amortisation grew 72 percent to $4.7m. Depreciation cost Eroad $3.6m in the first half, double the same period in 2016, while the cost of amortisation was $1.4m, from $789,149 a year earlier.

"Growth in the New Zealand business is anticipated to remain strong while North American growth is likely to remain modest until market acceptance of ELD (electronic logging device) compliance," the company said. "This assumes no further regulatory challenge, ELDs become widely available and operators begin seeking a service provider in earnest."


Chair Michael Bushby said the board was comfortable the company could fund its business in North America, having had external help with its US business strategy. Bushby said Eroad's opportunities in the US "as well as New Zealand remain considerable."

Bushby "noted that Eroad's New Zealand/Australia business generated sufficient cash flows from operations to fund all of Eroad's US operating losses, all Eroad's corporate costs and the majority of Eroad's R&D, such that cash utilised in the six months to fund these activities totalled $0.25m per month," he said.

The company has resumed outsourcing finance for customers renting new hardware, instead of funding it from working capital.

"Outsourcing of funding for customer finance is a cash management approach Eroad has previously employed successfully during the early stages of the development of the New Zealand business and was always envisaged as being the long-term solution to providing Eroad with customer finance options as the business grew," it said.

The volume of distance recorder units contracted to ERoad customers in North America increased 68 percent to 5,301 in the six months to September, the company said, and rose 35 percent to 38,129 in Australia and New Zealand. In the first half of the previous year, the number of units contracted rose more than 300 percent in North America, and 47 percent in Australia and New Zealand.

The New Zealand business had three record sales months in the first half. There has been market uncertainty in the US due to a legal challenge to laws requiring heavy vehicles to have an ELD, but this was thrown out at the end of October.

The shares recently traded at $1.85, up 4.5 percent today, They first publicly traded at $3.32 in August 2014, after being sold to investors at $3 apiece, and have lost a fifth of their value this year. Last month Bushby said the board didn't think the share price, then at a record low of $1.45, reflected the underlying value of the business.

No dividend was declared.