Mainfreight reports 28% lift in FY net profit, sees momentum

By Rebecca Howard

May 28 (BusinessDesk) - Mainfreight reported a 28 percent lift in full year net profit as it global network continues to strengthen across its three core services of domestic transportation, warehousing and international freight forwarding.

The Auckland-based company said net profit was $137.6 million in the year to March 31 versus $107.7 million in the prior year. Revenue lifted 12.9 percent to $2.95 billion and its earnings before interest, tax, depreciation and amortisation rose 19.5 percent to $257.1 million.

Net profit before abnormal items was $141.1 million, up 26 percent. Abnormal costs after tax totalled $3.5 million. Of this, $2.9 million related to the further write-down of the European brand name, Wim Bosman, which is in the process of being discontinued. The balance is restructuring costs in Europe and the Americas.

Looking ahead, it said "we remain confident that the momentum of the year just concluded will continue." It noted, however, "there is a level of uncertainty in global trade and slowing economies".

"Whilst not immune to such external effects, we continue to position ourselves to counter the headwinds and look for ongoing growth."

Mainfreight will pay a final dividend of 34 cents a share on July 19 with a July 12 record date, taking the full year dividend to 56 cents a share, up 24.4 percent on the year. The shares last traded at $36 and are up 17 percent so far this year.

In New Zealand, ebitda was up 12.2 percent to a record $110.6 million and it now has a branch network across all three services which extends from urban centres into regional areas with populations under 20,000.

"Delivery times and quality have improved and we have been able to secure new customers, including providing import and export services from many regional locations never before serviced by Mainfreight," it said.

In Australia, ebitda was up 11 percent to A$55.4 million after a "relatively slow start," it said.

In Asia, revenue was down 11.2 percent to US$74.5 million but ebitda lifted 28.2 percent to US$6.3 million on improved margins. It is now in eight countries and has 21 branches in Asia. It is looking to add a further six regional sales desk locations in second tier cities across the region, boosting sales reach and capability.

Intra-Asian freight movements were a growing feature of trade in the region. Tariffs affecting China-US trade saw volumes fluctuate and "diversifying our trade focus will assist, alleviating dependency on the volatile USA trade lanes."

Ebitda in Europe was up 30.9 percent to 23.3 million euros, reflecting strong performance in transport, particularly in the Netherlands.

The Americas continued to improve but "at a slower pace than we would wish." Ebitda lifted 37.2 percent to US$26.1 million. "The Americas region continues to offer us large-scale opportunity for market share gains. Our sales effectiveness needs to further improve for this to happen," the company said.

Operating cash flows were $197.4 million versus $140.2 million in the prior year "reflecting increased profitability, acceptable cash collection processes and increased depreciation."

Net debt is $130.5 million, down from $196.9 million and gearing ratios improved to 13.5 percent from 21.7 percent.

Its net capital expenditure was $89 million in the year and it expects to invest around $350 million over the next two years for property development globally.

(BusinessDesk)

ends

© Scoop Media