Tourists and migrants drive freight
"We move a lot of food and beverage and there's no doubt we've seen volumes rising through tourism and immigration." Don Braid
Mainfreight workers are in for a bonus of thousands of dollars each after the freight company posted another record profit, partly thanks to New Zealand’s tourism boom and immigration.
The profit after tax was 17 per cent higher at $103 million, on turnover of $2.3 billion, and also meant staff will get $19.7m in bonus payments, up 18 per cent on last year.
Managing director Don Braid said Mainfreight performed strongly in spite of the Kaikoura earthquakes affecting interisland cargo, and momentum was being maintained into the new financial year.
Staff bonuses were shared among branches based on their performance and the number of workers at each branch, so would be in the thousands of dollars for most staff members, he said.
‘‘If there hadn’t been the earthquakes we would have done better because we had to set up a new branch and road freight through the Lewis Pass. The extra fees we charged didn’t cover our costs,’’ Braid said.
He expected the main rail line between Picton and Christchurch to be restored by the end of the year, reducing demands on the inland roads.
The New Zealand Transport Agency has spent more than $60m upgrading the inland route to accommodate the increase from 50 to 600 trucks a day as well as increased car traffic.
‘‘We move a lot of food and beverage and there’s no doubt we’ve seen volumes rising through tourism and immigration,’’ Braid said.
He was confident about the outlook for the year ahead, with a focus on improving revenues and profits in Asia, the United States and Europe where there were significant growth prospects.
An additional 180,000 freight consignments were handled, and the extra business from tourism and immigration prompted the company to buy more land for warehousing and freight facilities, Braid said.
Mainfreight will spend $75m on more land and facilities in New Zealand and Australia, with associated expenditure including software of approximately $37m.
Air freight and sea freight teams have been operating out of new facilities at Christchurch International Airport.
From the turnover of $2.3b, about $1.7b was earned from overseas operations, with New Zealand cargo operations contributing $609m.
Australian road, warehousing, and air and sea freight activities increased 6.3 per cent to about $564m, allowing for currency movements.
European trade was up 10 per cent at approximately $460m, while US logistics and sea freight declined 4.7 per cent to $618m.
Results from operations in Asia were disappointing at $63m and Mainfreight withdrew from an unsuccessful leased warehouse business in Hong Kong.
Mainfreight shares have risen from $17.30 in August 2016 to $22.28 this month. The profit means shareholders get a healthy 24 cents fully imputed (taxed) dividend.