Freightways Q1 profit falls

Thursday 28th October 2010

Freightways posted a 4% decline in first-quarter profit, reflecting higher bank margins, and said the recovery in the domestic economy will continue at a tepid pace.

The operator of courier firms including New Zealand Couriers, Post Haste, SUB60 and Kiwi Express said net income declined to $6.7 million in the three months ended September 30 from $7 million a year earlier. Sales climbed 4% to $85.4 million.

“Freightways’ express package and business mail divisions has reflected the slow pace of the economic recovery,” managing director Dean Bracewell said. “While a number of encouraging signs continue to emerge in some of our businesses, this is not yet the case across all businesses.”

Operating earnings, measured by EBITDA, rose 2% to $15.4 million and Bracewell said this showed the company has been able to improve its operating performance “despite a difficult operating environment.”

Shares of Freightways fell 0.3% to $3.06. The shares have declined about 10% this year while the NZX 50 Index is little changed. The stock is rated ‘outperform’ based on the consensus of six recommendations compiled by Reuters.

The company’s information management unit had a 26% jump in operating earnings in the latest quarter, prompting Freightways to decide to invest in additional storage capacity in Sydney, Perth, Adelaide and Auckland, it said.

The company extended its service footprint in Australia by establishing its Shed-X brand in South Australia and New South Wales, it said.

“The information management division is expected to continue its sound growth,” Bracewell said.

Businesswire.co.nz

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