Transport firm’s profits down

Mainfreight has reported a decrease in revenue and profit as the transport company returns to more “normalised” trading.

Net profit for the six-monthly period to September 30 dropped by 43 per cent to $124.5 million. Revenue fell to $2.36 billion or by around 22 per cent, while operating cashflow declined to $186.8m from $291.4m.

Managing director Don Braid says the previous result was masked by “exceptionally high” freight volumes and rate structures, while the past half-year reflected more normal trading.

“This return to a more normalised trading environment has seen results across our air and ocean, and domestic transportation, categories decline. Our operations across the US, Europe and Asia are the most affected.”

Braid points out that inflation has increased the cost of doing business with net margins narrowing as a result.

“During September, we experienced small improvements in trading, particularly across our domestic freight networks in New Zealand and Australia. However, our American and European transport operations continue to lag.”

In New Zealand, revenue fell about 14 per cent to $557m with a slight lift in transport volumes over the six months.

Looking ahead, Braid says that while the macroeconomic trading environment remains slow, Mainfreight’s level of sales activities and opportunities provide confidence, as do domestic trade improvements in Australasia, while strong management of margin and overhead costs is key.

He adds: “We expect our second six months of trading to improve, albeit marginally, and remain confident of our medium to long-term growth prospects.”