New Zealand express and freight transport group Freightways said it achieved record revenues andearnings for the year ending June 30, 2008 despite a challenging domestic market.
Managing Director Dean Bracewell said that the successful execution of Freightways’ growthstrategy in the Australian market, a sound result from its core express package division in achallenging local market and outstanding performance from the information management division allcombined to help the company continue its run of consecutive record annual results since listing onthe NZX in September 2003.
The company reported that consolidated operating revenue for the year (to 30 June) rose 14%to NZ$324 million (€156.56 million) topping NZ$300 million for the first time. Earnings beforeinterest, tax, depreciation and goodwill amortisation (EBITDA) of NZ$68.5 million (€33.1 million)were 9% ahead of the previous year. Earnings before interest, tax and goodwill amortisation (EBITA)of $60.5 million (€29.23 million) for the year were up 7% on the last year. Consolidated net profitafter tax (NPAT) of $32.3 million (€15.61) was 5% higher than the prior corresponding period.
Dean Bracewell commented on the results: “Despite a very challenging operating environment inNew Zealand including rising fuel costs and negative organic volume growth, Freightways hasdelivered another record result and better positioned itself for future growth.”
In the express package division, the core express package brands of New Zealand Couriers,Post Haste Couriers, Castle Parcels, SUB60, Security Express, Kiwi Express and the recentlyacquired NOW Couriers continue to contribute the majority of the group’s revenue and earnings.Bracewell said the express package division achieved earnings for the year slightly above what itachieved in the previous 12 months. “The increased cost of fuel has had a significant impact.Despite this and other cost pressures, including the Government’s surprise increase to Road UserCharges, Freightways continues to make decisions for the long-term good of the business,” Bracewelladded.
DX Mail, a nationwide business mail competitor to NZ Post, significantly grew its overallvolume and revenue, but struggled with earnings in the second half of the year due to a changingbusiness mix that affected margins. In addition, DX Mail had to invest in adjusting its operationto comply with the new pricing-in-proportion regime introduced to the market by NZ Post in March2008.
Bracewell further said: “Freightways views the information management market as an emerginggrowth opportunity, as evidenced by its recent acquisitions. The group’s information managementbusinesses currently contribute around 15% of Freightways’ annual revenue and earnings and isexperiencing strong growth on both sides of the Tasman.”
Looking forward, Bracewell expects Freightways’ core express package division to continue toperform soundly overall, although fluctuating month on month volume, such as is currently beingexperienced, makes it difficult to accurately forecast near term performance. While some costincreases are expected to moderate in the 2009 financial year, the cost of fuel is naturally verydifficult to predict. Freightways’ business mail operation is expected to improve its year on yearperformance in 2009. Freightways’ information management businesses both in New Zealand andAustralia are expected to continue their positive development, the company said.
