Mainfreight has increased its annual profit by 7.7% to $83.5 million over the past year, and says its earnings will rise further in the coming year.
The leading transport and logistics group, notes particularly that it has increased profitability in New Zealand.
The Auckland-based company says profit excluding abnormal items rose 7.7% to $83.5 million in the year ended March 31, ahead of its forecast range of $80 million to $83 million.
The company had a $1.1 million one-time cost in the latest year and a $12.1 million gain the year earlier. Revenue increased 6.8%to $2.05 billion, at the top end of its $2 billion-to-$2.05 billion forecast range.
In New Zealand, earnings rose 9.2% to $73.6 million as revenue increased 7.4% to $542.7 million.
“Once again, the strength of our New Zealand presence saw all divisions increase profitability and achieve revenue growth,” says Mainfreight in a statement.
“Our New Zealand transport operations gained a large number of new customers, and increased the number of consignments transported through our network by 150,000. This builds on similar levels of growth in the year prior,” it adds.
“We continue to improve capability across most product categories of the supply chain and expect to see growth continue.”
In their NZ logistics operations, EBITDA was not as strong as the year prior as a result of additional costs from investment in specialised facilities, and disruption during their construction.
However, the NZ air and ocean division increased revenues and profit performance through strengthening regional network, and improving import volumes alongside a greater share of dry airfreight export tonnage.
Mainfreight notes that NZ is benefiting from its expanding global network of multinational customers. It has completed new facilities in Christchurch, Hamilton and Auckland and is eyeing three more new builds over the short to medium term.
Mainfreight is expanding its operations through Asia, North America and Europe in an attempt to become a significant global logistics business.
Slowdown in Australian operations
The company says its latest earnings have been hurt by a slowdown in Australia and a disappointing performance from its US operations. Still, it notes that earnings will improve in the coming year even as current trading in Australia is tougher than expected.
“It is our expectation that the benefit of the worldwide network will offset any negativity that we see in Australia as it recovers economically,” Mainfreight says in a statement.
“While these improvements may seem satisfactory, when compared to New Zealand’s level of growth and the relative size of the Australian market, we would have expected more in order to achieve our own aspirations and expectations,” it adds.
“Nevertheless, we continue to make progress in what is a difficult and competitive market. Australia’s current economic environment has not made this any easier.”
Mainfreight notes that its Australian transport and logistics operations continue to attract new customers. The commissioning of new purpose-built facilities in Brisbane, Sydney and Adelaide has assisted. New distribution and warehousing facilities are also underway for Melbourne and Perth.
Meanwhile, the air and ocean business has continued to find growth and profit improvement, leveraging off the expansion in the perishables market and benefiting from an expanding global network.
