Mainfreight net profit recovers for nine months

Freight company Mainfreight Ltd today reported a 20 per cent increase in net profit to $7.7 million for the nine months to December 31.

It had previously reported a six month sharp fall in net profit to $1.1m from $3.7m as a result of integrating the businesses of its 80 per cent held Owens Group into the company.

The nine result incorporated the results of Owens. Toll Holdings has blocked a full takeover of listed Owens with a 12 per cent stake.

Revenues for the nine months increased 50 per cent to $671m. Excluding Owens and foreign exchange movements, the increase was 15 per cent.

Earnings before interest, tax, depreciation and amortisation (Ebitda) rose 35 per cent on the year ago period.

Abnormal costs totalled $3.1m after tax and minority share of which the third quarter abnormals were $1.4m.

All abnormal costs were related to restructuring at Owens.

Cash flows were affected by the retirement of $13.5m bank debt and unusual working capital requirements for Owens.

"Now that the Owens' divestment process is complete cash flows will directly reflect the underlying success of the businesses," the company said.

It said third quarter, trading across the group was "very satisfactory".

"Strong economic activity and performance from our businesses in New Zealand and Australia saw most divisions improve over the same period last year.

"Trading indicators into the fourth quarter to date will provide a pleasing full year result."

New Zealand domestic revenues increased 10 per cent with ebit improving 14 per cent to $16.6m.

Mainfreight International ebit fell $1.2m from $1.8m as a direct result of Lep International rebuilding after a disappointing year.

Australian domestic revenue rose 44 per cent to $58m and ebit improved from a $4.2m loss to a loss of $300,000.

Australian International revenue rose 19 per cent to $155m with ebit up 46 per cent to $4.7m.

The company said it was experiencing good growth in Asia.

Mainfreight shares rose 7c to $2.65 having risen 62 per cent from $1.64 a year earlier.

- NZPA