Two into one takes a toll on the profits

By PAM GRAHAM

Mainfreight nearly doubled its first-quarter profit if Owens Group isn't included. It made a loss if it is.

The cost of putting two New Zealand transport and logistics companies together to combat the arrival of Toll Holdings of Australia is still knocking a hole in Mainfreight's accounts.

The company reported a $212,000 bottom line loss in the three months to June 30, down from a $1.14 million profit for the same period last year.

Excluding Owens' trading and related costs, the profit rose to $2.13 million on a 14 per cent increase in revenue.

Mainfreight said it was seeing no sign of an economic slowdown in trading in its current quarter.

"I would not call it hot, but it is certainly still steady and we're not seeing any downturn whatsoever," managing director Don Braid said.

He said most of the losses from Owens related to divestments of businesses, and the unit would have made only a small loss without them.

Mainfreight bought 79 per cent of Owens in October, and has said it found the group to be disparate and in worse shape than expected.

Braid said there was still some cleaning-up to be done.

Toll Holdings, which blocked Mainfreight from a full takeover of Owens, has said the performance of Owens' businesses has not been acceptable.

Mainfreight's New Zealand domestic business increased revenue by 12.4 per cent and operating earnings by 14.6 per cent.

Operating earnings of the New Zealand international business fell 57 per cent.

Mainfreight's Australian domestic business is still making a loss, but it reduced this to $1.5 million in the first quarter at the operating level.