Mainfreight rides high on back of growth

Managing director Don Braid says Mainfreight can cope with the crisis in Europe. Photo / Natalie Slade

The freight firm doubles quarterly profit and says it's well placed to deal with a slowdown.

Mainfreight is well placed to deal with a slowdown in major Western economies such as the United States and those in the eurozone, its boss says.

The NZX-listed, global logistics operator yesterday reported a net profit of $14.22 million for the quarter to June - a 109 per cent increase on the same period last year - and said it expected the improved performance to continue.

Group managing director Don Braid said the company held relatively small market share in Europe and North America.

Equity markets around the globe have been pummelled this week on fears of slowing growth and mounting sovereign debt in the United States, as well as in large European nations such as Italy and France.

"We've got some pretty aggressive sales teams looking to continue to improve our revenue so hopefully we won't have any effect [from an economic downturn] at all," Braid said.

"We're certainly not sitting back, thinking that times are easy again. It's still tough times and we will continue to adopt the right approach for our business."

Mainfreight Group's earnings before interest, tax, depreciation and amortisation (ebitda) hit a record for a first quarter result, reaching $32.13 million in the three months to June - more than double what the company reported for the same period last year.

Group sales for the quarter rose 43 per cent to $449.8 million, the company said.

Mainfreight said operating cash flows of $24.28 million, an increase of $10.63 million on the prior comparable period, reflected the improved trading performance.

Forsyth Barr analyst Rob Mercer said the lift in sales for the quarter was due to a gain in market share, rather than improved economic conditions.

"All said and done it looks like profit growth for 2012 is very encouraging," he said.

Shares closed up 15c at $9.77 on the NZX yesterday.

New Zealand domestic ebitda lifted 28 per cent to $8.88 million, while revenue rose 9 per cent to $73.44 million, the company said.

In its New Zealand international division, Mainfreight's sales increased 9 per cent to $30.74 million and ebitda improved 29 per cent to $1.18 million.

Australian domestic ebitda rose 80 per cent to $4.30 million and ebitda in its Australian international division lifted 15 per cent to $1.38 million.

In Asia revenues rose 6 per cent to $9.24 million, although costs incurred for expanding the company's network in China resulted in a 33 per cent reduction in ebitda.

Braid said Mainfreight, which opened a branch in the northeastern Chinese coastal city of Qingdao on June 1, was looking to open sites in Chengdu, in China's southwest, and in Beijing.

The company said ebitda in its United States operations rose 20 per cent to $3.81 million.

Sales for the Wim Bosman Group, its newly acquired European footprint, reached $118.82 million, while ebitda sat at $11.98 million, Mainfreight said.