“Freight volumes and warehousing utilisation have all increased on the prior period,” Mainfreight said.
“This improvement in profitability during our second quarter is expected to continue into the second six months of our financial reporting period.”
US market takes a hit
When Mainfreight reported its results for the year to March 31 earlier this year, managing director Don Braid said the company had grown larger and attracted more customers, but it should have performed better.
Mainfreight reported net profit of $277.9m in the 2024 year, a 35% drop, but this was off the back of record highs and a period of extraordinarily high freight volumes.
In commentary on the half-year result, Mainfreight said its NZ division outperformed an investor day pre-tax profit estimate by 2%, largely due to improvements in the local transport sector.
“Continuing weakness in the NZ economy has contributed to flat revenue growth despite ongoing market share gains,” the company said.
“Increased overheads associated with new building facilities in Auckland [contributed] to the lower profit result. Transport volumes, while increased, continue to be imbalanced towards north to south transits, impacting returns.”
In the Americas, Mainfreight reported revenue of US$347m ($585m) and profit before tax of US$8.4m, down 30%.
The company described it as a “disappointing overall profit result”, pointing to the impact from its transport operations and sea transport business CaroTrans.
“While transport volumes are showing improvement, margins continue to be impacted by fixed road linehaul development to aid and improve our service quality,” Mainfreight said.
Mainfreight said profitability reflected challenging trading conditions across all the regions where it operated.
“However, we remain very active in our sales activities, attracting and retaining customers across our supply chain service offering,” the company said.
“The associated revenue and tonnage increases provides confidence of further improvement in our results for the next six months and beyond.”
Mainfreight expected to spend $204m on capital expenditure in the 2025 financial year, down from the $233m signalled at its October investor day.
“Careful management of our capital expenditure associated with our property and network development has seen some expenditure delayed into the following two years,” it said.
“Likewise, new property leasing commitments are aligned with customer growth expectations.”
The company added: “We remain well-positioned to continue to find market share opportunities and to take advantage of improving economic conditions as they occur across our international network.”
- BusinessDesk
