Mainfreight first quarter profit improves as expected

By NZPA

Wednesday 21st August 2002

Listed freight firm Mainfreight's first quarter net surplus of $630,000, in line with company expectations, improved on the $211,000 deficit for the same period last year.

Mainfreight said in a statement today that its results for the three months ended June had been cushioned by the company's spread of business activities, and improvements in its offshore investments.

Group earnings before interest, tax, depreciation and amortisation (ebitda) was $3.84 million, up from $3.46 million last year.

Mainfreight also announced a one-for-10 taxable bonus share issue, to distribute $14 million of tax credits amassed by the end of its financial year.

For every 10 shares held, one extra share would be created, totalling 7.31 million new shares. That would use up $4.25 million of the imputation credits.

The amount treated as dividend for income tax purposes is $1.18 per share.

New Zealand sales revenues increased by 9.3 percent, although ebitda dropped to $3.4 million from $3.6 million through margin pressures and higher labour costs.

"We do see a flattening of the New Zealand economy, particularly in the provincial areas where growth in the previous year was strong," Mainfreight directors said.

As a result the company was trying to reduce costs, and was reviewing rates to increase its margins.

International sales revenues decreased by 8.4 percent, as the high activity last year in perishable airfreight to European countries in response to the foot and mouth outbreak disappeared.

International ebitda fell to $353,000, from $517,000, while in Australia ebitda was a loss of $926,000, compared with a deficit of $1.35 million in the same period last year.

"We ... do not expect to see profits (in Australia) until our third quarter of this year. Progress continues with new account gains and freight volumes are increasing month to month."

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