NZX-listed Freightways has updated the market with one-off earnings costs which includes the impact of flood-damaged roads following Cyclone Gabrielle.
To date the impact of recent severe weather on its express package businesses has been in the region of $2 million in earnings before interest, tax and amortisation (EBITA) as a result of lost revenue and additional operating costs to circumnavigate impacted roads, it says.
“The affected businesses decided not to recover this through a surcharge as access to affected areas progressively improved to the point that on Monday night linehaul trucks were able to travel directly into Hawkes Bay via State Highway 5,” the company says.
Freightways is also continuing to plan for a potential dual listing on the ASX and expects to incur one-off costs associated with the preparations as well as merger and acquisition activities.
These costs are expected to be in the range of $1.5m-$2.5m during this financial year to June 30.
Recent acquisitions by Freightways have also increased amortisation costs such as Allied Express and will increase the annual amortisation of the group by around $6.5m.
In addition, within the express package aircraft fleet, Freightways has made the decision to replace an existing leased 737-400 with a leased 737-800 from May 2023 as well as engage in a short-term lease of a 737-400 to cover the heavy maintenance period for the existing air fleet.
“While this will incur higher lease and operating costs, it is also expected to offer improved reliability, greater carrying capacity and reduced emissions. The net annualised impact in costs is expected to be $3.5m p.a,” it says.
“Since the announcement of the half year result express package volumes have remained steady compared to the same period last year.
“The company remains mindful of the risk of slower business and consumer activity in the short term, particularly in New Zealand, and will continue to match resources with volume,” it says.
