Mainfreight first half profits plunge 36pc

Photo / Sarah Ivey.

Mainfreight has reported a 36.5 per cent fall in half year profit to $10.9 million, even as conditions in all markets where the company operates were "much improved" in the second quarter.

For the six months to the end of September, Mainfreight's trading revenue fell 14.3 per cent from a year earlier to $535.8m, while net profit before abnormals dropped 29.3 per cent to $12.2m.

"Importantly, second quarter performance saw revenues and profitability improve markedly from our first quarter's results," Mainfreight said.

Direct comparisons showed revenues up 4.8 per cent and ebitda (earnings before interest, tax, depreciation and amortisation) up 50.5 per cent.

While seasonality of freight volumes was a contributor, trading during the second quarter had seen a general improvement which continued into the third quarter, the company said.

"We welcome the upturn but remain cautious about overall economic conditions in each country where we are located."

Trading during October and November indicated further improvements likely for the third quarter, Mainfreight said.

"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 with strong sales campaigns."

An interim dividend of 8.5c per share is to be paid.

In the New Zealand domestic division, ebitda declined 14.5 per cent to $14.5m compared with the same period last year, but September 2009 month ebitda exceeded that of September 2008 by 9.8 per cent. Sales revenues fell 16.4 per cent to $128.4m, down $25.2m from a year earlier.

Domestic freight volumes were rising with increased market share assisting revenues.

In the Australian domestic division ebitda was up 41.5 per cent to $6m, while sales revenues fell 4.7 per cent to $90.6m.

Warehousing volumes had been strong through September and October as suppliers to retail built stock volumes for Christmas, Mainfreight said.

In the United States , trading continued to be difficult in both the domestic and export sectors. Even with a weak US dollar, export volumes had declined from their peaks at this time last year.

Total revenues fell 24.7 per cent to $164.7m, while ebitda for the region was $3m down from $8.4m in the year prior.

- NZPA