Mainfreight has posted half-year net profit of $72.9 million, up 23% year-on-year with strong results in New Zealand and Australia.
Revenue was up $108.3m (7.2%) to $1.6b for the six months to September 30.
The results were in line with the previous guidance issued in October with the company calling it a “pleasing half-year result considering the slow start to the year through the Covid-19 lockdowns in the various countries and regions.”
“This result reflects the strong improvement in performance in our Australian and New Zealand operations, supported by ongoing progress in our Asian business,” it says.
“Profitability in the Americas continues to improve month by month, closing in on the prior year’s first half, and while our European operations are also trading behind the year prior at this point, we have seen improved trading subsequent to 30 September 2020.
“This supports an optimistic view of ongoing improvement in both regions, notwithstanding the reintroduction of Covid-19 related lockdowns/restrictions.”
New Zealand (NZ$)
Revenue $379m, up $16.3m (4.5%).
Profit before tax $37.5m, up $2.8m (8.3%).
“Strong domestic and international volumes continue to benefit our New Zealand business units, particularly in the last three months, which has seen the impact of the Covid-19 level 4 restrictions in April and May redressed.
“Ongoing customer gains and strong consumer growth trends are providing record tonnage across our transport networks.
“Warehousing activity is pleasing, albeit inventory levels are low due to congested shipping and air supply chains.
“Our air & ocean business continues to see good results in both import and export trade. Space constraints are frustrating, but we have seen revenue levels improve, in part by increased freight rates from shipping and air lines.
“Trading in October and now into November continues this improvement, with pre Christmas volumes expected to increase further and the benefit of new customers assisting.”
Australia (AU$)
Revenue AU$403.2m, up AU$42.7m (11.9%).
Profit before tax AU$30.5m, up AU$15.6m (104.3%).
“A very pleasing result from our Australian operations led by strong domestic transport performance.
In our transport business, the combination of ongoing market share growth and enhanced network efficiency has seen sales revenues increase alongside improving net margins. Three branches have been opened in this half-year, with a further six planned.
Warehousing growth continues, with utilisation at 90% despite international supply chain congestion.
“While profitability continues to improve in our air & ocean division, margins have been impacted as shipping and air freight rates increase.
“Expectations are for a further increase in freight volumes pre-Christmas, and as a consequence of Victoria reopening after 112 days of lockdown.”
Asia (US$)
Revenue US$42.9m, up US$6.9m (19.3%).
Profit before tax US$3.9m, up US$1.4m or 59.2%.
“A pleasing result from our Asian business. Demand for both shipping and air space is assisting our sales growth, albeit space availability and equipment are difficult to find. We have also seen better performance from our Southeast Asian branches, particularly as some manufacturing has moved to this region from China.
“Air freight growth has been assisted by Covid-19 related tonnage, and the establishment of specialised air freight branches within the network.
“Freight revenues leading into Christmas remain elevated, and we expect the current profit and revenue trends to continue.”
The Americas (US$)
Revenue US$248m, up US$3.9m (1.6%).
Profit before tax US$8.5m, down US$1.2m (13%).
“A disappointing overall result from our American businesses, particularly in our domestic transport operations and in CaroTrans (our NVOCC wholesale sea freight business).
“Improved performance in our Warehousing business has resulted in good revenue growth and increased warehouse utilisation. Additional warehousing sites are currently being planned for Chicago and Dallas, on increased customer enquiry.
Air & ocean revenues continue to increase, with trading in the last month exceeding expectations. Air freight in particular has shown pleasing progress.
“Transport volumes were impacted during the half year, but we have seen good signs of improvement in the past month as more customers open manufacturing and warehousing activities. Customer gains have been satisfactory, and we expect sales revenues to improve with Christmas trading.”
Europe (Euro €)
Revenue €193.7m in line with prior year.
Profit before tax €7m, down €0.9m (12.1%).
“A poorer than expected result, as our European operations continue to struggle from the economic effects of Covid-19.
“Low inventory levels brought about by high consumer demand, and constrained supply chains have impacted our Warehousing profitability.
“While intra-European Transport volumes have been steady, increased short-term illness has had a negative impact on efficiency levels and margins.
“Air & ocean revenues have improved, however capacity constraints across sea and air carriers have reduced margins.
“Revenue growth will be aided by an amount of new business gained, and we expect improved performance through the balance of the financial year. While several European countries have recently enforced further lockdowns, activity remains consistent at pre-lockdown levels.”
