Mainfreight (NZX:MFT) posts HY revenue growth of 32%; shares fall

• Mainfreight has reported a profit growth of 66%.
• The company expects the decline in sea freight rates to impact the performance of its Air and Ocean division.
• Mainfreight expects to release its full-year results in May 2023.

New Zealand-based global freight and logistics company Mainfreight Limited (NZX:MFT) announced its half-year results today (10 November 2022). According to the company, the results were in line with expectations.

MFT reported a revenue of NZ$3 billion, up NZ$729 million or 32%. Profit before tax was NZ$301.71, up 66%, and net profit after tax was NZ$217 million, up 66%.  

The satisfactory results, the company said, were the outcome of carrying over the momentum from the previous year. However, going forward, MFT expects its Air and Ocean division’s performance to moderate as sea freight rates are likely to decline.

Region-wise performance

New Zealand

In New Zealand, Mainfreight’s revenue was up 29% to NZ$ 644.60 million. Profit before tax was up 55% to NZ$74.46 million. The company’s transport network increased its footprint in New Zealand and service levels, as per the update, have also shown an improvement due to the lifting of COVID-19 restrictions and supply chain decongestions.

Air and Ocean’s growth continued in the first half of the year, but now freight rate reductions will have an impact, said the company.

Australia

In Australia, MFT clocked a revenue of AU$697.37 million, up 33%.  Profit before tax was AU$63.22 million, up 42%. The growth was due to the ongoing good performance of its Transport and Air and Ocean segments.

As per the update, the company set up new transport facilities in Adelaide and South  Melbourne.

The company is also planning new warehousing facilities in Adelaide.

The Americas

Mainfreight stated that revenue from the Americas totalled US$562.84 million. This region saw growth due to the improved Air and Ocean division performance. In this region, while the freight rates were reduced, the company was able to grow by developing new businesses.

Asia

In Asia, due to a decline in ocean freight, the revenue was down 9%, at US$ 100.49 million. However, profit before tax was US$15.91 million, up 38%. The company is looking at the ongoing development of its Southeast Asian, Korean, and Japanese networks.

Capital expenditure

In the half-year, the net capital expenditure for Mainfreight amounted to NZ$178.1 million. A  major chunk of this was spent on land and buildings, almost NZ$145.6 million. The company spent NZ$24 million on plant and equipment and around NZ$8 million on information technology.

Outlook

Mainfreight said today (10 November)  that its performance in the half-year was satisfactory. However, going forward, it has grown its revenues by 2% in October and November compared with the prior comparable period.  

The company said that it would continue to focus on improving its network for the long term across all regions and look for new customer opportunities

Mainfreight said the full year’s financial results will be released in May 2023 and a trading update will be provided in February 2023.