10 Nov 2015

Mainfreight profit edges lower on higher costs

4:33 pm on 10 November 2015

One of the country's biggest transport firms, Mainfreight, has reported a 2 percent fall in its first half profit as a lift in revenue was offset by a rise in its costs.

Mainfreight has reported a net profit of $32.9 million for the six months ended September, compared with $33.5m last year despite a near 13 percent rise in revenue to $1.1 billion.

New Zealand freight volumes were up on a year ago, but labour costs and the costs associated with new facilities in several parts of the country have eaten up the gains, a Mainfreight spokesperson said.

Elsewhere, the United States was trading strongly with revenue growth, while Asia was firmer and Europe was edging higher, but Australia was weaker.

The company described the result as disappointing, with gains in revenue and margin eroded by increased overheads.

But it said most of the higher costs had gone into new and larger facilities, while its wages bill had increased as it built its operations ahead of expected growth globally.

Higher earnings and margins should be maintained through the second half, which along with better cost controls should lift its full year profit, a company spokesperson said.