Mainfreight third quarter results:
Revenue - $992.8m up 53pc
Profit - $29.5m up 0.4pc
KEY POINTS:
Mainfreight Group's net profit has risen slightly to $29.5 million in the first nine months of the financial year, but the group says it has been hampered by subsidised competition from KiwiRail.
The $29.5m profit represents a $100,000 or 0.4 per cent increase on the same period last year.
The result, while satisfactory for the year to date, saw a decline in performance during the December quarter (traditionally the busiest period) when compared with the prior period in 2007, which was the largest ever, said group managing director Don Braid.
A labour freeze implemented in October has seen the group's personnel numbers reduce by over 5 per cent through natural attrition. Labour costs are reducing accordingly.
"We continue to maintain a cautious and fiscally prudent approach to costs and capital expenditure. Mainfreight has a strong balance sheet and sufficient levels of debt facility should this be required for further growth."
New Zealand domestic operations continue to benefit from the ability to utilise road, rail and coastal shipping as volumes fluctuate, he said.
"However we remain disappointed that KiwiRail has failed to eliminate the freight subsidies afforded to the previous owners of the rail network by December 2008, as required in the sale and purchase agreement," said Braid.
"It is unacceptable to subsidise a foreign company, particularly one which in our view has done no favours for New Zealand."
Mainfreight's consolidated sales revenues for the period were $992.8m, compared to $645.4m last year, an increase of 53.8 per cent.
A second bank facility has been put in place with the Commonwealth Bank of Australia, in addition to that with our long-term banking partner, Westpac. This provides increased flexibility and reduces our exposure to a single facility.
New Zealand domestic sales revenues provided a year to date increase of 9.7 per cent to $230.9m.
For the December quarter revenues improved by only 1.2 per cent in what historically has been the strongest trading period.
Ebitda performance year to date improved 4.2 per cent over the previous year to $28.6m. This improvement was affected by a 6.1 per cent decline in the December quarter.
In Australia sales growth improved 31.2 per cent to $146.5m. For the December quarter revenues improved 21.4 per cent over the prior period.
Through the acquisition of the minority interests in the Asian business, revenues increased from $4.9m to $19.7m.
Combined operations in the United States provided a revenue increase of 163.7 per cent to $352.3 million. The newly acquired operations of Mainfreight USA contributed $204.2m to this total.
- NZPA
