Australia a standout for Mainfreight

Mainfreight managing director Don Braid. Photo / Supplied

Mainfreight's Australian pre-tax profit has more than doubled in its first 17 weeks of trading this financial year as the global logistics group grabs market share across the Tasman.

Australia had been a disappointment for Mainfreight in the six months ended September 30 last year as a slowing economy led to reduced freight volumes. However, that appears to have turned around, with the division lifting pre-tax profit 167 per cent to A$17.9 million ($19.3m) in the 17 weeks ended July 26 on a 13 per cent increase in revenue to A$287.9m.

Slides accompanying managing director Don Braid's address to shareholders today said the company expects those results to continue through the year, with new business and the general transport network supporting the unit.

Mainfreight said the current spike in new Covid-19 cases in some parts of Australia and increased restrictions haven't disrupted or altered freight flow or volumes.

The Australian performance underpinned an 8 per cent lift in group revenue to $1.19 billion in the period, and a 20 per cent increase in pre-tax profit to $53.2m.

When reporting its annual result in May, Mainfreight said the company had adapted well to the pandemic and was pleasantly surprised at activity levels in New Zealand, Australia, Asia and some parts of Europe.

PPE shipments a bonus

Today, Braid's presentation showed the Asian business was bolstered by shipments of personal protective equipment, with South East Asia a key area for growth. The division lifted revenue 41 per cent to US$51.8m ($78m) and pre-tax profit was up 63 per cent at US$2.6m.

Mainfreight's NZ business reported a 1 per cent increase in revenue to $268.6m, although pre-tax profit fell 8 per cent to $16.7m as the April lockdown led to a sharp drop in activity. Since then, things have picked up but while Mainfreight said that trend is expected to continue, it won't be at the elevated pre-lockdown levels.

European revenue increased 1 per cent to 145.23 million euros while profit fell 13 per cent to 4.1 million euros with tough trading conditions in April and May, and the upcoming summer holiday is set to lead to a seasonal decline in volumes.

Trading in the US was slow, and Mainfreight said it expects the Americas will take longer to recover from the pandemic. Revenue slipped 3 per cent to US$167.7m for a 35 per cent decline in pre-tax profit to US$3.8m.

Mainfreight shares closed at $43.60 up 2.8 per cent on the day and not far off the $43.99 record in January.