Strong firsthalf result for Mainfreight as revenue rises 16%
BELLWETHER global transport and logistics company Mainfreight has delivered a strong firsthalf result, especially from New Zealand and European operations.
Revenue for the half to September rose 16.8% to $1.43 billion. Earnings before interest, tax, depreciation and amortisation (ebitda) was up 22.1% to $108.3 million and aftertax profit climbed 30.7% to $55.9 million.
Of total revenue, 76% was derived from offshore divisions and provided 58% of ebitda.
Mainfreight’s interim dividend rose by 3c from a year ago to 22c. Mainfreight shares rose 4.1% to $29.95 following the announcement; being 18.5% up on a year ago.
Craigs Investment Partners broker Peter McIntyre said it was a ‘‘good result’’ with most div isions beating expectations, and New Zealand and European profit margins were particularly stronger than expected.
‘‘The main exception was Australia, which showed revenue growth in line with expectations, but higher growthrelated operat ing costs affected its ebitda.’’
Asian sales revenues were up 7.2%, the US 16.8%, Europe 12.2%, New Zealand 8.3% and Australia by 16.7%.
Forsyth Barr broker Damian Foster said it was a ‘‘very strong’’ firsthalf result, and above expectations.
‘‘We expect fullyear earnings upgrades as a result,’’ he said.
While recognising Mainfreight was operating against a relatively weak comparative period last year, it was still a strong result.
‘‘Geographically all businesses contributed with margin expansion achieved in all divisions, with the exception of Australia,’’ Mr Foster said.
New Zealand revenue was $343.1 million, up 8.3% compared with the same period a year earlier, domestic freight volumes hitting record levels, BusinessDesk reported.
Mainfreight managing director Don Braid said a billion dollars was earned offshore in terms of revenue in this first half alone.
‘‘What is changing is that we have had good contributions at the ebitda level from all five regions. No longer are we lagging in Europe or the Americas or Asia,’’ BusinessDesk reported.
Australian revenue was $A341.7 million ($NZ364.2 million), up 16.7%, and Mainfreight noted that freight volumes continue to grow heading into the preChristmas period.
In Asia, revenue lifted 7.2% to $US40.2 million ($NZ59.3 million) and the company said network development across South East Asia gained momentum with its first Malaysian operation opening on October 15, after the end of the 2018 financial year.
Mainfreight also expects to have its first Japanese operation open in early 2019.
The Americas saw revenue lift 16.8% to $US237 million.
The air and ocean operations saw revenues increase in the Americas but gross margins declined, the company said.
However, ‘‘improvements in margin are evident during October and November, providing confidence for an improved ebitda result from Air & Ocean at year end,’’ it said.
European revenue lifted 12.2% to ¤182.33 million ($NZ303.86 million), with sales growth across all divisions. — Additional reporting: BusinessDesk