Mainfreight has posted a net profit of $130.81 million for its half-year result, up 79.4% year-on-year.
Its revenue was up 41.4% to just over $2.2 billion for the six months to September 30.
An interim dividend of 55 cents per share has been set by the board, an increase of 83.3%.
The company says its pleased with the result, particularly in light of supply chain congestion and ongoing lockdown disruptions across most markets.
The result was boosted by an increase in air & ocean revenue performance in all regions. This was due to higher air and sea freight rates and an increase in freight tonnage as a result of market share gains and consumer demand.
Supply chain distruption
The company says it’s experiencing congested supply chains across a wide range of trade lanes, both domestically and internationally.
Capacity shortages and customer demand remain at elevated levels for its air & ocean operations.
Port congestion is “exacerbating the ocean freight supply issues” with in excess of 600 vessels on average waiting outside the world’s ports, pending discharge. Container equipment shortages add to the situation, it says.
“It is our expectation that the imbalance of supply and demand will see supply chain congestion remain into the near future, with freight rates similarly remaining elevated.”
Earlier this year it was reported that the company was chartering ships to get around major international supply chain delays.
In its half-year announcement, Mainfreight says it “continues to focus on finding space availability solutions wherever possible” for its customers.
“This includes bulk-shipping and alternative services to address container shortages, and the chartering of aircraft where volumes dictate.
“The benefits of our own network are allowing our people to maintain reasonable service levels for our customers in light of the congestion,” the company says.
It says transport operations in all countries are coping with the increased volumes and transit times have been “relatively unaffected”.
However, it is urging New Zealand customers to ship earlier rather than relying on overnight and two-day service levels due to a shortage of rail and ferry capacity between the two islands.
“Maintaining ‘Just In Time’ inventory levels is becoming more difficult as supply chain congestion continues,” it says.
New Zealand (NZ$)
- Revenue $498.45m, up 31.6%
- Profit before tax $48.07m, up 28.2%
The company says its had a “disrupted first half performance” for its New Zealand operations with the transport network affected with the August level 4 lockdown.
It says volumes are recovering well and there has been a significant increase in home deliveries.
Warehousing activity “continues to be strong” as customers hold more inventory to better withstand supply chain disruptions.
“Air & ocean volumes continue to grow as we find solutions for our customers in the congested shipping and airfreight environment.
“Trading across all three divisions has continued to strengthen post-September with expectations of this continuing well after December. Unfortunately, a lack of rail and ferry capacity is slowing inter-island deliveries,” it says.
Australia (AU$)
- Revenue AU$525.04m, up 30.2%
- Profit before tax AU$44.52m, up 45.7%
Mainfreight says its Australian business “continues to find increasing growth and profitability, predominantly from increased market share”.
Three additional regional branches are expected to open over the next 12 months.
“Service levels, while improving regional coverage, are under pressure as volumes begin to stretch our capacity in main centres,” it says.
New Warehousing facilities for Sydney, Melbourne and Adelaide are confirmed and under construction. Additional capacity is being negotiated for Brisbane.
Air & ocean volumes and revenue are also up as demand exceeds supply across its international network.
Europe (Euro €)
- Revenue €260.43m, up 34.4%
- Profit before tax €12.57m, up 77.8%
A number of new warehousing customer gains are expected in the medium term.
Transport margins are “not as healthy as we would like” with lower than expected utilisation across a number of new line-haul routes, particularly into and from Germany.
“Brexit delays add to the already-stressed supply chain, albeit volumes have reduced from their peak earlier in the year,” it says.
“Whilst trading post the August European summer period has not been as strong as we would have expected, volumes pre-Christmas are increasing and transport utilisation levels are improving.”
The Americas (US$)
- Revenue US$441.4m, up 78%
- Profit before tax US$34.83m, up 309.7%
Mainfreight’s US results were “dominated” by the performance across its air & ocean business, “where demand has been exceptional”.
“Whilst volumes have increased and new customer gains are assisting, the ability to secure additional capacity is restricting our growth.”
Domestic transport volumes have continued to increase with improved road line-haul utilisation throughout its network.
Warehousing utilisation and activity continues to increase.
Its CaroTrans NVOCC wholesale business has benefited from strong international shipping demand, particularly in the volumes of less-than-container load freight movement.
“Trading post-September across our USA businesses has continued to be strong and is expected to remain this way post-December.”
Asia (US$)
- Revenue US$110.35m, up 157%
- Profit before tax US$11.5m, up 189.2%
Its Asian operations benefited from increased demand for shipping and airfreight capacity.
“In line with the balance of our international network, airfreight volume and capability continues to be a significant contributor. Similarly, sea freight capacity constraints are limiting growth.
“Trading remains strong post-September and is expected to continue, subject to space availability, well into the New Year and leading up to Chinese New Year,” the company says.
