14 Oct 2020

Mainfreight expects 23% increase in first half profit

10:42 am on 14 October 2020

Mainfreight expects underlying first half profit to be up nearly a quarter on last year, with revenue growth across its global network.

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Photo: Wikimedia Commons

In a presentation to investors, New Zealand's largest transport company said its pre-tax first half profit was estimated to be up more than 23 percent to $102.2 million in the six months ended in September over the year earlier.

It said there was overall improving customer and sales demand across the globe, with increasing pressure on air and sea freight and demand for warehousing.

Group revenue growth was expected to be up 7.2 percent to $1.6 billion, with particularly strong growth in Australia and Asia.

New Zealand's domestic volumes, which accounted for more than a third of the group profit, was estimated to be up nearly 9 percent to $37.3m, with Australia up 99 percent to $30.5m and Asia up 61 percent to $4.0m.

Conditions in Europe and the Americas were a drag on profits amid a number of uncertainties associated with the ongoing Covid-19 pandemic.

Europe's revenue was flat, with underlying profit down about 11 percent, while the Americas' conditions were more challenging, with an overall 1.4 percent lift in revenue, and 13 percent drop in profit.

Mainfreight expected to see an increase in pre-Christmas trading, with a second wave of Covid-19 infections affecting economies.

The company said it was responding to the uncertainties by taking a conservative stance on capital spending, although it was exploring land opportunities in Nelson and Auckland.

It said it was likely to increase capital spending in the next financial year.

The company will release its first half result 11 November.