Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Freightways profit gains as interest payments fall

Freightways first-quarter profit edges higher on lower interest payments

By Paul McBeth

Oct. 29 (BusinessWire) – Freightways Ltd., the courier firm that sold stock at a discount this year to strengthen its balance sheet, posted a 2% gain in first-quarter profit after the capital raising allowed it to repay debt and reduce interest payments.

Net profit rose to $7 million in the three months ended Sept. 30, from $6.8 million a year earlier, the company told shareholders at their annual meeting today. Revenue fell 5% to $81.8 million, reflecting a decline in total package volumes. Earnings before interest, tax, depreciation and amortisation fell 5% to $15.1 million. The shares declined 2.2% to $3.08 and have edged down 3.4% this year.

“Proceeds from capital management initiatives executed during 2009 have been used to reduce debt and strengthen Freightways’ balance sheet so that the company is more strongly positioned,” managing director Dean Bracewell said. “Newly renegotiated finance facilities which provide certainty through until August 2012 were implemented during September” though these will incur higher interest charges as banks have increased their own margins, he said.

Earlier this year, Freightways raised about $50 million in a discounted share placement to institutional investors. In August the company announced an underwritten dividend reinvestment plan with Forsyth Barr to boost its balance sheet and preserve cash that would otherwise have been paid out in dividends. The dividend was cut to 8.5 cents per share, from 9.25 cents a year earlier.

Bracewell said the economic recovery is still “fragile” and warned that if “recent improvement cannot be sustained and augmented with positive organic volume growth, then the express package and business mail division’s near-term performance will continue to track below the prior year.”

Last month, Freightways signed a deal with Australia Post to deliver the postal service’s international inbound express mail service, air parcels and courier products through its DX Mail and New Zealand Couriers units.

The company expects its information management division to improve as the year continues, with paper revenues likely to “react positively to global economic improvement.”

The company expects capital expenditure of about $13 million in 2010, which is “significantly lower” than this year.

(BusinessWire)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>

Commerce Commission: Cartel Conduct Now Punishable By Up To 7 Years’ Jail Time

Cartel conduct can now be punished with a term of imprisonment of up to 7 years, after the Commerce (Criminalisation of Cartels) Amendment Act 2019 came into effect today. Cartel conduct includes price fixing, market allocation and bid rigging (see ... More>>

Stats NZ: Auckland Population May Hit 2 Million In Early 2030s

Auckland’s population may rise from about 1.7 million currently to 2 million by early next decade, Stats NZ said today. “Auckland will likely have the highest average annual growth of New Zealand’s 16 regions over the next 30 years, from ... More>>


Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>

PwC: Outcome Of Review Into Air New Zealand Gas Turbines Business

Air New Zealand has received the report into its Gas Turbines business from independent external advisers PwC. Air New Zealand Chairman Dame Therese Walsh says the report identified a range of effective controls in the Gas Turbines revenue contracting ... More>>

LPG Association: Renewable LPG Achieves Emissions Budgets With No Need To Ban New LPG Connections

Renewable LPG can supply New Zealand’s LPG needs and achieve the emissions reductions proposed by the Climate Commission without the need to ban new connections, a new study shows. The investigation, by leading consultancy Worley, was prepared for the ... More>>