Freightways recovers from Covid financial challenges of first quarter. Photo / File
Freightways recovers from Covid financial challenges of first quarter. Photo / File
Freightways has bounced back from a lockdown-hit start to its 2022 financial year to post net profit growth and a 7.7 per cent revenue increase for the half year.
Calling it "our half of two quarters", the company posted a profit of $43.6m for the six months to December 31, on revenue of $441.9m. Operating profit before interest and income tax was $70.5m.
The first quarter of the year saw revenue down by 4.1 per cent and an ebita decline of 9.2 per cent mainly due to the financial impact of lockdowns, the company said.
However the second quarter generated revenue growth of 20.3 per cent and an ebita lift of 20 per cent as the company's diverse business network saw a surge in volumes for express courier items and perishables carried through its Big Chill business, an increase in the amount of medical waste needing collecting and processing in Australia, and a lift in an information management activity.
The company will pay an interim dividend of 18c per share.
It announced the appointment of independent director Mark Cairns as new chair.
The former Port of Tauranga chief executive will replace chair Mark Verbiest who will retire on March 31 after 11 years on the board and four years as chair.
Former Port of Tauranga CEO Mark Cairns is Freightways' new chair. Photo / George Novak
Cairns, who headed New Zealand largest port for 16 years, joined the Freightways board in April last year.
The company also announced the appointment of professional director, investor and former investment banker David Gibson to the board. He will stand for election at the October annual shareholders' meeting.
The NZX-listed company said the economic climate remained uncertain but it was encouraged by the strong trade in the express package business and the resilience of its information management operation.
However it expected Covid's impact would continue through this financial year through higher volumes of home delivery during rising in-home isolation and potential restrictions to its customers' businesses or its own networks as Omicron forced workers into isolating - all in the context of a very tight labour market.
Freightways last week announced a major development for its temperature-controlled logistics business Big Chill, at the emerging Ruakura Superhub near Hamilton.
A purpose-built 13,000m2 cold store facility will swell Big Chill's depot numbers to 10 and will be the first tenant operation in the industrial precinct of the Superhub development, which will also feature an inland port and logistics hub.
The cold store, to be built by Ruakura Superhub developer Tainui Group Holdings, the commercial arm of Waikato-Tainui, will cost around $40. It's expected to open in July 2023 with capacity for storing up to 6,000 temperature-controlled pallets.
Freightways chief executive Mark Troughear said the expansion of Big Chill was part of the company's plans to grow in the temperature controlled, Quick Service Restaurant (QSR), fresh and frozen delivery category.
Reporting on its half year, the company said strong volume growth had lifted express package and business mail division revenue by 7.2 per cent on the same period last year.
Another highlight was a 67 per cent lift in medical waste revenue with Covid requiring many more sites to be serviced.
"While we expect some of that pricing to moderate over the second half of the year, revenue for FY22 should exceed $20 million for the first time for the fully year, which would represent a 7x-fold increase on the small business we acquired in 2018."
On the information management side, contracts had been signed for digitalisation revenue for FY22 and FY23 on both sides of the Tasman. They represented $10m and $21m respectively.
Capital expenditure for FY22 was forecast to be $24m-$26m, invested in a number of IT development projects, medical waste plant, vehicle replacement and freight handling equipment.
