Otago Daily Times

Rev­enue and profit up at Main­freight

- AN­DREA FOX Business · Finance · Taxes · Oceania News · Investing · Greater Auckland · New Zealand · Americas

AUCK­LAND: New Zealan­ders with money burn­ing a hole in their pock­ets due to low in­ter­est rates and Covid­frus­trated over­seas travel plans have helped drive up half­year profit and rev­enue for freight and lo­gis­tics com­pany Main­freight.

Net profit for the six months to Septem­ber 30 nudged $73 mil­lion, com­pared with $59 mil­lion for the same pe­riod last year, while rev­enue lifted 7.2% or $108.3 mil­lion to $1.6 bil­lion.

The com­pany will pay an in­terim div­i­dend of 30c per share, 20% up on last year’s in­terim div­i­dend. It ex­pects its full­year re­sult to be ‘‘much im­proved’’ on last year’s.

Man­ag­ing di­rec­tor Don Braid said the highlight of the re­sult was strong per­for­mances in the New Zealand and Aus­tralian op­er­a­tions, where con­sumer de­mand for goods was driv­ing a very con­tested sup­ply chain and chal­leng­ing han­dling ca­pac­ity.

Strong do­mes­tic and in­ter­na­tional vol­umes in the New Zealand oper­a­tion had re­dressed the im­pact of the Covid­19 level 4 re­stric­tions in April and May.

Profit be­fore tax in the Aus­tralian busi­ness was up 104% or $A15.6 mil­lion ($NZ16.5 mil­lion) at $A30.5 mil­lion.

Do­mes­tic eco­nomic ac­tiv­ity in coun­tries served by Main­freight was strong — ‘‘provided you’re in the right in­dus­try’’, which Main­freight was with fewer air­craft op­er­at­ing and ship­ping com­pa­nies down­siz­ing.

Group op­er­at­ing cash­flows were $188.5 mil­lion, up from $123 mil­lion in the prior year, re­flect­ing in­creased prof­itabil­ity and strong cash col­lec­tion.

Net debt dived $41.9 mil­lion to $115.4 mil­lion, gear­ing ra­tios fall­ing to 10.4% from 14% in March this year.

Cap­i­tal ex­pen­di­ture was also trimmed to $54.8 mil­lion. The com­pany ex­pects cap­i­tal ex­pen­di­ture for the full year end­ing March 31 to be in the range of $103 mil­lion. A fur­ther $114 mil­lion was es­ti­mated for capex in the 2022 fi­nan­cial year.

Profit be­fore tax in the New Zealand busi­ness was up 8.3% at $37.5 mil­lion, and rev­enue rose 4.5% to nudge $379 mil­lion.

Trad­ing in Oc­to­ber and into Novem­ber con­tin­ued the im­prove­ment with pre­Christ­mas freight vol­umes ex­pected to in­crease fur­ther and new cus­tomer num­bers on the rise.

Space con­straints con­tin­ued to be frus­trat­ing, but rev­enue was im­prov­ing, in part lifted by in­creased freight rates from ship­ping and air­lines.

Strong do­mes­tic trans­port per­for­mance across the Tas­man lifted rev­enue there 11.9% to $A403.2 mil­lion.

In Asia, profit be­fore tax rose 59.2% to $US3.98 mil­lion ($NZ5.79 mil­lion) and rev­enue was up 19.3% at $US42.9 mil­lion. Air freight growth was helped by Covid­re­lated ton­nage and new spe­cialised air freight branches within Main­freight’s net­work.

Covid­19 had im­pacted the Amer­i­cas and European busi­nesses.

The Amer­i­cas busi­ness posted a 1.6% lift in rev­enue to $US248 mil­lion with profit be­fore tax down 13% or $US1.27 mil­lion to $US8.5 mil­lion.

Do­mes­tic trans­port and the whole­sale sea freight busi­ness CaroTrans had pro­duced an over­all dis­ap­point­ing re­sult in the Amer­i­cas, the com­pany said.

How­ever, there had been good signs of im­prove­ment in the past month in the trans­port op­er­a­tions busi­ness as Amer­i­cas cus­tomers opened man­u­fac­tur­ing and ware­hous­ing.

In Europe, rev­enue at ¤193.7 mil­lion ($NZ332.9 mil­lion) was flat on last year, and profit be­fore tax down 12.1% at ¤7 mil­lion.

This was a poorer­thanex­pected re­sult for the European op­er­a­tions which were strug­gling from the ef­fects of Covid­19. — The New Zealand Herald

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