Mainfreight result keeps earthquake costs at bay
Mainfreight has improved its New Zealand profits even after last year’s Kaiko¯ura earthquake increased the cost of moving freight across the Cook Strait.
The company, which is one of New Zealand’s biggest cargo movers, used more road and coastal shipping in the absence of the Kaiko¯ ura coastal railway.
Higher trade volumes and the company’s expanded warehousing operation helped offset the poorer results of Mainfreight’s overseas divisions.
‘‘With rail services reinstated and functioning to the South Island from the start of November, it is our expectation that our New Zealand domestic operations will outperform in the next six months,’’ Mainfreight managing director Don Braid said.
In spite of the challenges, revenue for the New Zealand division was up 10.2 per cent at $316.87 million for the six months ended September 2017.
For the domestic operations, profit before interest, depreciation and tax was ahead 3.5 per cent of the previous corresponding period at $38.4m.
Domestic freight volumes are ahead of where they were this time last year. They will continue to rise as pre-Christmas retail activity builds towards its peak.
Mainfreight’s air and ocean freight business was steady, with import revenues growing over exports. However, the division had experienced quieter trade during October and November compared with the previous period.
The company’s Australian operations improved, with profit well ahead and revenues up 13.7 per cent to A$292 million ($324m).
Performance in Asia was disappointing as revenue rose 19 per cent to $37m but profits fell by half. American revenues fell 10 per cent along with profits due to the loss of a significant air freight account.
European operations fared better and Mainfreight will invest more in logistics in the Netherlands and Belgium.
Overall, the company reported total revenue up $83m, or 7.3 per cent over the same period last year, to $1.23 billion.
After accounting for redundancies, interest and tax the net profit was up 1.1 per cent over the prior period at $42.77m.
A fully imputed dividend of 19 cents a share will be paid.
Higher trade volumes and Mainfreight’s expanded warehousing operation helped offset the poorer results of its overseas divisions.