KEY POINTS:
Mainfreight Group has reported a net first quarter profit of $67.3 million, of which $61.2 million was from the sale of two business units.
Excluding abnormals and divested operations, the net surplus was $5.8 million compared to $5.5 million in the same quarter last year.
The quarterly result released today is Mainfreight's first to be reported under new accounting standards. As a result information from previous periods has been restated accordingly.
At the start of June Mainfreight said it had sold Pan Orient Project Logistics and its 75 per cent interest in LEP (New Zealand and Australia) to global logistics company Agility Group for A$83 million ($97 million), subject to various escrow and working capital arrangements.
For continuing businesses, earnings before interest, tax, depreciation and amortisation (ebitda) performance during the three months ended June improved 6.1 per cent to $11.9m, Mainfreight said.
After taking foreign exchange effects into account, the increase was 10.8 per cent.
Trading conditions during the quarter were challenging, but all divisions continued their profit improvement performance, the company said.
Revenues from continuing operations were down slightly to $178m, compared to $180.5m in the corresponding three months a year earlier.
Excluding foreign exchange adjustments, continuing revenues increased 4 per cent.
Revenues for the New Zealand domestic division were down 2.2 per cent, largely as a result of reduced fuel adjustment factors, in a challenging economic environment during what was traditionally the company's quietest quarter.
Ebitda for the division improved 10.2 per cent, including a one off property gain on sale of $600,000. Trading remained flat into the second quarter, the company said.
For the New Zealand international division revenues were significantly affected by the high New Zealand dollar on export volumes.
Import volumes continued to increase and contributed to improving performance into the second quarter, while ebitda performance was in line with last year.
In the Australian domestic division, excluding foreign exchange, revenues continued to improve to A$27.7m ($32.4m), up 13.7 per cent.
Ebitda, excluding foreign exchange, remained in line with last year, Mainfreight said.
Ebitda growth was affected by higher warehousing occupation costs as capacity was increased to cope with future confirmed increased tonnage.
Revenues in the Australian international division lifted 10 per cent from A$24.6m to A$27m, while ebitda improved 24.9 per cent to A$740,000.
USA international revenues improved 19.1 per cent to US$21.2 ($31.3 million), while ebitda lifted 22.2 per cent to US$1.3m.
"USA acquisition activity remains intense with due diligence proceeding on schedule," Mainfreight said.
During the quarter the Asia international business traded as an associate, with Mainfreight's share of earnings up 25.7 per cent, excluding foreign exchange, to $300,000.
Mainfreight announced previously that agreement had been reached for it to buy the remaining shares it did not already own. In future the business would report as a fully owned subsidiary.
Group operating cash flows were slightly ahead of last year, the company said.
The sale of the Lep and Pan Orient interests had allowed the full repayment of long-term loans, putting the group in a positive net cash position of $18.6m.
Group earnings were expected to continue improving during the year, despite tough trading conditions in New Zealand.
Mainfreight shares closed yesterday at $7.20, having ranged between $8.15 and $5.95 in the past year.
- NZPA
