Revenue and profit up at Mainfreight

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