KEY POINTS:
Transport and logistics firm Mainfreight expects earnings to remain stable in the near term, despite global economic weakness.
The company yesterday reported a first-half net profit of $17.22 million, up 9.5 per cent over the same period last year. The result excludes the $61 million gained from the sale of its interests in freight-forwarding business LEP and logistics business Pan Orient in the first half of last year.
Sales revenue for the six months to September 30 soared 63 per cent to $625.02 million - improvements were achieved in all the company's businesses in New Zealand, Australia, US and Asia - but was accompanied by a 70 per cent spike in transport costs to $420.04 million, and a 60 per cent rise in labour costs to $114.38 million. Earnings before interest, tax, depreciation and amortisation improved 23 per cent to $35.36 million from the year before's $28.72 million.
Managing director Don Braid said it was a satisfactory result.
"We remain focused on improving our market share across all our areas of operation, particularly in those countries where our current share is small relative to the market size.
"In our strongest market, New Zealand, we continue to [see] growth opportunities as a result of our core strengths, quality, and the size and scope of our network coverage."
Given the current trading environment, the company was adopting a cautious approach to its costs and capital expenditure, although trading into its third quarter - traditionally its strongest - has been encouraging, said Braid.
The company's first half saw operating cash flows rise from $16.03 million to $20.24 million. Net capital expenditure was $20.60 million, with property development costs contributing $14.10 million to this amount.
Braid said funding facilities remain more than adequate for current and medium term requirements.
A fully imputed interim dividend of 8.5c per share was declared, up from 8c in the previous corresponding half year. Mainfreight shares closed at $4.21, down 11c; brokers said the result was below expectation.
