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Mainfreight more than doubles first-quarter profit

Mainfreight more than doubles first-quarter profit

Aug. 11 (BusinessDesk) - Logistics company Mainfreight Group more than doubled first-quarter profit to $14.2 million, reflecting both improved performance in New Zealand, Australia, the U.S. and Europe as well as earnings from its Wim Bosman acquisition.

The company expects this improved financial performance to continue throughout the financial year.

Mainfreight said only Asia's results were behind the previous year's because of increasing costs as it develops its network in China.

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) for the three months ended June rose to a record $32.1 million from $15.5 million in the same quarter last year while sales rose 43% to $449.9 million.

The bottom line, which was up 109%, was dragged down a little by $400,000 in one-time costs relating to the Wim Bosman purchase which was settled on April 1. Excluding those costs, net profit rose 115%.

Also excluding Wim Bosman, sales rose 5% to $331 million and EBITDA climbed 30% to $20.2 million.

“Our domestic freight divisions in New Zealand, Australia, the US and Europe are standout performers for this period,” Mainfreight said.

New Zealand domestic EBITDA rose 28% to $8.9 million and sales were up 9% to $73.4 million with the company claiming consistent freight volume and market share increases, particularly in the fast moving consumer goods sector. It said trading in July and August “continues to be positive with further market share gains assisting.”

Australian domestic EBITDA rose 80% to $4.3 million on an 18% sales increase in sales and the company said this trend continued into July and August.

Mainfreight USA lifted EBITDA from breakeven to $1.6 million, reflecting better margins and cost improvement as well as increasing domestic freight sales – sales were up 4% to $60.7 million. Excluding foreign exchange movements, sales were up 18%.

In Asia, EBITDA fell 33% to $0.6 million despite a 6% rise in revenues (or 20% excluding foreign exchange movements), reflecting extra costs.

In Europe, Wim Bosman contributed revenue of $118.8 million and EBITDA of $12 million.

“This performance was an improvement over the same period the year prior. Seasonality trading differences are yet to be fully understood as the European holiday season takes effect during July and August,” Mainfreight said.

While the Netherlands and Eastern European transport divisions contributed good performances, the Belgium transport division and the air and ocean international division disappointed, it said.

It is developing international freight to and from its Asian and US operations and has appointed new management in Belgium.

Other international operations produced patchy results with New Zealand EBITDA rising 29% to $1.2 million and Australian EBITDA rising 15% to $1.4 million despite a 5% drop in sales revenue.

In the US, CaroTrans sales fell 11% to $41.6 million, reflecting poor export freight volumes, and EBITDA fell 31% to $2.2 million. The company said an increase in export seafreight is now providing better results.

Mainfreight shares closed at $9.62 yesterday. They have dropped from $10.75 early in August. However, before that fall, the shares have trended higher from $6.35 this time last year. While the Top 50 index is now up about 4% on a year ago, Mainfreight's shares are up about 46%.


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