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Freightways Delivers Another Record Half-Yr Result

Freightways Limited

Freightways Delivers Another Record Half Year Result

AUCKLAND, 07 February 2005: Freightways Limited (NZX:FRE) in announcing its half year results to 31 December 2004 has again delivered record six monthly revenue and profit figures.

Consolidated operating revenue for the half year of $117 million was 10% higher than the prior corresponding period, with earnings before interest, tax and amortisation (EBITA) of $26 million up by 28% and net profit after tax and minority interests of $11 million up 46%.

Managing Director Dean Bracewell reports that cash generated from operations of $28 million reached a record level, up 38% on the prior corresponding period and 25% ahead of the projected operating cash flows stated in Freightways’ August 2003 Investment Statement and Prospectus at the time of its IPO.

He says the half year result “reflects another record period for Freightways in which all businesses have contributed improved profitability.” As a result, the directors have declared a dividend of $9.45 million, compared with $7.25 million for the same period a year ago. This dividend translates to 7.5 cents per share fully imputed (compared to 5.85 cents for the same period a year ago), and will be paid on 31 March 2005. The dividend record date is 18 March 2005.

In his review of operations Mr Bracewell says the express package businesses again contributed the majority of revenue and earnings, with results from all brands - New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60, and Security Express - “significantly ahead of the previous half year.”

While the favourable domestic economy and the positive characteristics of the express package niche of the transport industry continue to create growth opportunities, he says “all our express package businesses increased their earnings and benefited from the leverage that is gained by adding revenue to Freightways’ established national infrastructure.”

Investment by Freightways in capacity across a broad range of areas also contributed to and further enhanced Freightways’ customer service. This investment was all within the expected level of expenditure for the period.

In the area of business mail Mr Bracewell says the development of DX Mail’s domestic mail delivery network was “of particular note. While still in its infancy, this street delivery network is contributing to the overall improved result of DX Mail and offers business mail customers a competitive choice for mail delivery,” he says.

Freightways’ information management brands also delivered a greatly improved result. Mr Bracewell says the development of a purpose-built leased facility adjacent to the main Freightways Auckland site in Penrose by the end of the financial year “will create much needed capacity for our increasing records management volumes and provide land for future growth.”

Freightways has also negotiated additional funding headroom of $22 million that Mr Bracewell says “will assist Freightways to continue exploring and developing stepped growth opportunities.”

Mr Bracewell says Freightways “does not expect any material changes to the underlying characteristics of the express package industry that will negatively impact performance as a result of the recently announced ownership change at its major competitor. At this stage of its annual business cycle, and subject to economic and business factors beyond its control, the outlook for Freightways, its shareholders and all other stakeholders remains positive and is expected to deliver a strong result for the full year to 30 June 2005.”


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