Global transport company Mainfreight's full-year net profit is down 8.5% on the year earlier, despite an improved performance in the second half of the year end in March.
By Nona Pelletier of RNZ
"While we are disappointed to not have improved our profitability from last year, we remain satisfied with the level of improvement during the second six months of trading," managing director Don Braid said.
"Pleasingly, these improvements have continued into the new financial year.
"Trading in April and May has been encouraging, despite disruption and uncertainty caused by the Middle East conflict and elevated fuel pricing."
Key numbers for the 12 months ended March compared with a year ago
- Net profit $251m vs $274.3m
- Revenue $5.39b vs $5.24b
- Underlying profit $350.9m vs $383.6m
- Operating cashflow $589m vs $584m
- Full year dividend $1.72 per share vs unchanged.
Core products
- Transport revenue up 10.2 percent to $2.49b Underlying profit down 8.9 percent to $154.7m
- Warehousing revenue up 5.1 percent to $909.8m Underlying profit down 3.8 percent to $135m
- Air & Ocean revenue down 6 percent to $1.98b Underlying profit down 10 percent to $135m
Capital investment
Land and building investments during the year totalled $112m, with new facilities completed in Auckland, Whanganui, Hastings, New Plymouth, Brisbane, Melbourne and Townsville.
"While the additional overhead cost increases as a consequence of these investments impacted our profitability, these network investments will provide capacity and efficiency for improved profitability long term," Braid said.
Total planned capital expenditure through to the end of the 2027 financial year (FY27) was forecast to be $234m, including $174m in property and fit-out costs.
"Network growth remains a cornerstone of our long-term strategy; however branch numbers reduced from 337 to 331 this year, addressing unprofitable performance in our Asian Warehousing, CaroTrans in Americas, and Italian Transport business. It is our expectation that we will increase our branch and country locations in the near term.
Discretionary bonus
"Despite the profit result being behind our expectations and the results of the prior year, improvements during our second half, pre bonus, have been encouraging," Braid said.
A total of $46.3m would be shared with team members in branches who have contributed satisfactory profits in New Zealand, Australia, Asia and Europe.
Divisional performance (figures in local currencies)
New Zealand (NZ$)
- Revenue $1.20b Up 3.8 percent
- Profit Before Tax $120.8m Down 10.2 percent
Australia (AU$)
- Revenue $1.51b Up 0.2 PERCENT
- Profit Before Tax $152.6 million Up 11.1%
Asia (US$)
- Revenue $117.5m Down 6.9 percent
- Profit Before Tax $12.9m Up 31.4 percent
Europe (Euro €)
- Revenue €624.0 million Up 3.5 percent
- Profit Before Tax €25.2 million Down 18.6 percent
The Americas (US$)
- Revenue $616.3m Down 7.4 percent
- Loss Before Tax $(7.9m) Down 151.7 percent
Fuel supply disruptions
"As a consequence of the Middle Eastern conflict, the cost of fuel, in particular diesel, has increased significantly," Braid said.
"These cost increases had a marginal effect on trading this financial year, with increases only beginning to impact at the end of March 2026."
He said the domestic transport business worldwide was the most affected by fuel cost increases.
"Diesel remains the preferred and necessary fuel for freight distribution, and sea and air freight cost increases follow accordingly.
"Fuel adjustment factors are applied to our customers' freight rates as a means to recover the fuel cost increases. These adjustments are passed through to our owner drivers, contractors and service providers. It is our expectation that fuel costs will remain elevated for some time to come."
Outlook
"Improved trading conditions that assisted our second half performance have continued to further improve during April and May," Braid said, adding stronger than expected sales growth had assisted.
Supply chain freight solutions continued to be a strong focus in our customer relationships, with increased trading across all three divisions.
"We remain focused on high quality freight services, particularly across the food, beverage and retail customer verticals."
Braid said Mainfreight would continue its network and facility expansion as a consequence of the improved outlook.
A market update would be provided at the company's annual meeting on July 30.
SHARE ME