Mainfreight sees easing Australian half-year outlook


Mixed bag as overall gain tempered by stalling Transport division

Mainfreight sees easing Australian half-year outlook
Transport lag was offset by growth in Air & Ocean, and Warehousing

 

On the surface, its results show a positive inclination, however New Zealand operator Mainfreight has warned on "slowing economic conditions", particularly with regards to its Australian arm.

Releasing its trading update for the six months ending September 30, 2019, accounts show Mainfreight’s overall revenue increased 4.9 per cent to NZ$1.5 billion (A$1.39 billion) on last year’s corresponding period; earnings before interest, tax, depreciation and amortisation (EBITDA) was up 62.9 per cent to NZ$119.11 million (A$110.40 million); and net profit was also up 6.2 per cent to NZ$59.13 million (A$55.29 million).

While a "satisfactory result", it comes "as a consequence of our global presence providing growth and increased profitability across various markets with differing economic climates and market share opportunities".


This result comes off the back of Mainfreight's 'best ever' full-year result


The picture was less optimistic in Australia, where Mainfreight recently marked its 30th year of market presence.

"A disappointing profit … primarily in our domestic Transport operations. Our Warehousing and Air & Ocean businesses both achieved satisfactory revenue and profit growth," it comments on the following result:

  • Revenue A$360.42 million, up A$18.72 million or 5.5 per cent
  • EBITDA A$22.62 million, up A$0.11 million or 0.5 per cent

"In our Transport business, revenue growth stalled at 2 per cent as slowing economic conditions saw reduced tonnage from our established customers," it continues.

"Whilst new business continues to be won, it has not offset this down-trading during the first half.

"Increases in our overhead cost structure, primarily labour costs, saw EBITDA decline on the prior period."

The company does, however, note that new customer gains lifted warehouse utilisation with satisfactory profit improvements, and construction has commenced on its second warehouse site in Epping, Melbourne.

Meanwhile, Air & Ocean operations achieved better gross margins and export volumes in both sea and air freight improved, assisted by continuing momentum in the growth of perishable air freight.

Despite what it concludes is a largely unsatisfactory first half for its Australian business, Mainfreight notes pre-Christmas volumes have seen weekly results improve into the second half.

 

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