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What is Mainfreight’s global supply chain status?

3 min read | September 22, 2021 05:00 PM NZST | By Sonal
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What is Mainfreight’s global supply chain status?
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Highlights

  • Trading across all regions continued to be greater than previous year.
  • MFT was satisfied with its trading levels and performance till 1 September 2021.
  • The Group has witnessed a lower-than-anticipated decrease in revenues amid the COVID-19 lockdown in NZ.

Mainfreight Limited (NZX:MFT) is a global supply chain company that offers managed warehousing and freight forwarding services around the world.

MFT had posted a record result in FY21 with sales revenue crossing $3.5 billion for the first time as all its 5 regions reported positive growth in the period. However, global supply chains’ congestion continued to stay affected by high freight rates and lower capacity.

Mainfreight stock with its market cap and returns

Image source: © 2021 Kalkine Media New Zealand Ltd, Data source- EODHD/Others

As per the Group’s latest trading update, MFT’s trading across all regions persists to be ahead of previous year as it approaches half year of 30 September 2021.

Regional overview of MFT’s business

After New Zealand impose Alert Level 4 lockdown on 18 August, domestic transport trading witnessed a drop in revenue of nearly 30%, while warehousing activity remained steady with previous weeks as the onset of import containers persists to fill up customers’ stock.

The Group’s Air & Ocean divisions have shown the demand for MFT’s services but have been operating under congestion in global supply chains.

RELATED READ: How are 5 NZX transportation stocks faring amid lockdowns?

In Australia, trading stayed robust in all 3 divisions and trading levels are expected to be strong in the Christmas period. MFT continues to witness good financial improvement in the Americas through improved trading conditions, majorly led by Air & Ocean business.

ALSO READ: NZ to spend NZ$24.3B on transport services and infrastructure in three years

Financial performance for Europe has stayed consistent with previous updates. Air and Ocean activity is strengthening, and warehouse utilisation is improving in the region, However, anticipated summer holiday reductions can have an impact on its Transport division.

DO READ: A lens on 5 NZX retailers amid the prevailing lockdown

In the Asian region, air & ocean business continues to bolster with an increase in demand.  However, shipping schedules were affected due to port congestion with Vietnam seeing stronger lockdown limits resulting in reduced shipping volumes.

On 22 September, at the time of writing, MFT was trading at $93.01, up 0.66%.

Bottom Line

It remains to be seen how trading will be impacted by Alert level changes in the country and various regions globally.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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