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Mainfreight first-half profit plunges 37%

Mainfreight first-half profit plunges 37%; trading improved in second quarter

By Paul McBeth

Nov. 19 (BusinessWire) – Mainfreight Ltd., the biggest trucking company on the NZX 50, posted a 37% slump in half-year profit as its U.S. operations continue to struggle. Trading improved in the second quarter, it said.

Net profit fell to $10.9 million in the six months ended Sept. 30 from $17.1 million a year earlier, the company said in a statement. Earnings out of the U.S. slumped 65% to $3 million, while total earnings before interest, tax, depreciation and amortisation declined 17% to $29.4 million. Total sales fell 14% to $535.8 million, and profit excluding abnormal sank 29% to $12.2 million.

“Trading for Mainfreight USA during October and November has again been marginally better, but is still of concern,” the company said in a statement. “Sales growth and improved efficiency remains our highest priority.”

Shares in the company have climbed 16% to $5.65 on the NZX this year. The company will pay a 8.5 cents per share interim dividend.

Mainfreight’s performance was better in the second quarter and “trading during October and November indicates further improvements likely for the third quarter,” the company said. EBITDA in the second quarter fell only 6.2% from the same period in 2008.

“We believe that the market will be fragile for the first quarter of calendar 2010, therefore we remain focused on improving margins and sales growth,” it said.

In the domestic New Zealand market, the company’s biggest by earnings, EBITDA sank 14% to $14.5 million, almost matching the 16% decline in sales to $128.4 million. New Zealand international earnings climbed 24% to $2 million, while revenue dropped 5.7% to $48.1 million.

Australian domestic operations boosted earnings 42% to $6 million while sales dropped 4.7% to $90.6 million. Australian International boosted earnings 1.8% to $2.8 million and sales fell 2.7% to $92.2 million.

Asian international revenue climbed 0.5% to $11.9 million, though earnings declined 22% to $1.1 million.

(BusinessWire)

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