Budget changes may take $6m off Freightways net profit

Freightways, which owns NZ Couriers, says it too will be affected by recent Govt tax changes to buildings depreciation. Photo / Glenn Jeffrey.

Freightways has joined the list of companies advising of the impact on its bottom line of changes announced in last month's budget.

The company said today that it expected to increase its consolidated deferred tax liability as at June 30 this year and reduce the reported net profit after tax for the year to June by an estimated $6 million.

The deferred tax adjustment was a one-off, non-cash accounting entry which had no impact on underlying profitability, cash flows or dividend policy for the year to June, Freightways said.

Today's statement comes after the Government announced the corporate tax rate would fall from 30 per cent to 28 per cent from July 2011, while the tax deductibility of depreciation for buildings with a life of 50 years or more would be removed.

Freightways said there may be a need to adjust its deferred tax liability further once the outcome was known of a government review of the definition of "building structure".

- NZPA