New Zealand-based Freightways increased profits in the half-year ending December 31, 2011,thanks to a good performance in its core express business and expansion of its information
management activities.The group operating revenue rose by 9% to NZ$192 million (€121 million), while underlying EBITDAwent up by 9% to NZ$31 million (€19.5 million). Underlying net profit was 16% higher at NZ$18.3million (€11.5 million).
Managing Director Dean Bracewell said Freightways delivered a strong half year operating resultthat “is above the prior period in all respects, again demonstrating the resilience of the group,the positive features of the market it operates in and the high quality of its subsidiarybusinesses.”
Highlights included the very positive financial performance, two information managementacquisitions and the continued successful execution of growth strategies across both the expresspackage & business mail division and the information management division, he said.
Bracewell said the Freightways team in New Zealand and Australia “has again demonstrated itsability to deliver superior performance in a half year that has seen significant growth in bothoperating divisions. The benefit of the successful industry and geographical diversificationstrategy embarked upon in previous years is also evident in this result.”
The core express package & business mail division increased its operating revenue by 6% toNZ$149 million in the half year while EBITA of $26 million was up 9%. This division contributesaround 80% of Freightways’ revenue and earnings through its brands of New Zealand Couriers, PostHaste, Castle Parcels, NOW Couriers, SUB60, Security Express, Kiwi Express and DX Mail.
A particularly strong first quarter was followed by sound performance in the second quarter,with increased volumes from many existing customers and price increases underpinning the revenuegrowth, the company said. During the half year the Hawkes Bay businesses relocated to new andlarger premises while work also commenced on the redevelopment of the Post Haste Couriers andCastle Parcels depots at the main Auckland site. The Auckland works are to enable the futureaccommodation on site of NOW Couriers, currently operating from a separate location.
The Christchurch earthquakes disrupted a number of Canterbury-based customers of a smallinternational postal business that Freightways acquired in November 2010, resulting in the revenueand earnings from that business only reaching around 80% of expectation. As a result, theperformance hurdle for an earnout payment was not met and the reversal of this liability hasprovided a positive non-cash earnings benefit of $0.25 million to Freightways’ half yearresult.
Operating revenue from the information management division grew 19% to NZ$44 million and EBITArose 9% to NZ$7 million.
Looking forward, Bracewell said that “based on experiences in the first half of the 2012financial year we expect to see continued gradual improvement in the market segments in which weoperate. Freightways has consistently demonstrated its ability to compete successfully in an openlycompetitive environment and it will continue to do so. Our express package brands are among themost recognised in New Zealand, our people have a depth of experience second to none and ourservice culture will continue to set us apart from our competitors.”
Capital expenditure for 2012 of around $20 million is expected, which includes the one-off $4million depot refurbishment at the main Auckland site.
