Mainfreight profit growth stalls

By Paul McBeth

Thursday 19th February 2009

Mainfreight, the biggest trucking firm on the NZX 50 Index, said profit growth stalled in the first nine months of the year, as transport costs rose, reducing the benefit of a jump in sales.

Profit from continuing operations edged up $6,000 to $29.4 million in the nine months ended Dec. 31. Sales jumped 54% to $992.8 million. Transport costs soared 61% to $670.7 million. Net profit after tax fell to $29.4 million from $89.9 million a year earlier, reflecting a $61.4 million gain on an asset sale a year earlier.

"This result has seen a decline in performance during the December quarter, traditionally our busiest period," the company said in a statement. "We continue to maintain a cautious and fiscally prudent approach to costs and capital expenditure."

The company lodged displeasure over the continuing freight subsidies provided to Toll Holdings by KiwiRail. It said it was "unacceptable to subsidise a foreign company, particularly one which in our view has done no favours for New Zealand."

Stock in the company dropped 5 N.Z. to $3.60 yesterday, and has tumbled over 35% in the last 12 months.

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