Full-year earnings likely to be record
Freightways expects to report record full-year earnings for 2013, it has told the market.
However, the express package and information management company’s earnings forecast for next year is below market expectations.
The company expected its fullyear net profit after tax (NPAT) for the year to June to be about $38 million, up 6 per cent on the previous year, it has said in a profit forecast.
Freightways said it expected to announce a record earnings before interest, tax and amortisation (EBITA) result of about $65m, an increase of 5 per cent compared with 2012.
However, its forecast for 2014 is not meeting market expectations.
First NZ Capital head of institutional equities James Lee said Freightways’ 2014 full-year forecast was lower than expected and as a result Freightways’ share price had dropped back yesterday morning.
The company’s shares were trading down 3.1 per cent at $4.37 at 11am.
Analysts had expected Freightways to forecast a 7 per cent increase in 2014 full-year EBITA, and a 10 per cent increase in NPAT.
However, the company said it expected to increase EBITA in 2014 by 5 per cent and NPAT by 6 per cent. Lee said the weaker earnings forecast for next year was because of the slow recovery of the New Zealand economy.
Freightways said it expected to be operating in a positive but slow growth environment for the foreseeable future.
Managing director Dean Bracewell said he was happy with the record result for the 2013 financial year, especially considering the changes to the traditional mail systems.
There had been a decline in the company’s letters business DX Mail.
There had also been some decline in traditional retail volumes, he said.
‘‘More mail is going directly to households rather than shops.’’ However, employee commitment and the high quality of business had helped offset those changes, which had led to the record earnings forecast, Bracewell said.
Freightways bought Universal Mail, a small New-Zealand-wide company, but because of the impact of the Christchurch earthquakes the company was not able to meet its earnings target and Freightways did not have to pay the scheduled $1 million.
It also excluded $1m related to Christchurch insurance claim proceeds.