Mainfreight eyes facilities boost to halt local revenue slip


Record interim revenues were unable to hold Mainfreight’s profit line, the international logistics firm reports. Australia has been a tough market for the firm.

Mainfreight eyes facilities boost to halt local revenue slip
An artist’s impression of the Epping site once finished.

 

Record interim revenues were unable to hold Mainfreight’s profit line, the international logistics firm reports.

Higher costs generally and softer trading in Australia and the US were blamed as first half profits slid 1.5 per cent to NZ$33.14 million (A$30.81 million).

This was despite revenues rising 12.9 per cent to $NZ1.114 billion, "a record for our half-year reporting" , the New Zealand-headquartered company says.

Earnings before interest, tax depreciation and amortisation was up for Asia and Europe operations, but fell in Australia, New Zealand and the Americas "as overhead cost increases exceeded gross margin increases".

Trading in September improved across all five regional divisions, and weekly pre-Christmas volumes were stronger through October and into November.

Australia has been a tough market for the firm.

Sales revenues were up 5.2 per cent to A$248.58 million, with air freight and shipping to the fore, but efforts there were "hindered by the lowest levels of revenue growth for some time in our domestic operations". EBITDA was down 14.4 per cent to A$13.18 million.

Domestic transportperformance "was well below our expectations", with EBITDA down 25.8 per cent for the period," the company says.

Overhead cost increases and poor sales growth were all factors affecting the result.

Overheads were up 9.1 per cent, gross margin was also up 4.8 per cent but "market share improvements [were] not as evident as [in] previous years".

The company will look for improvements in is pick-up and delivery management, particularly in Sydney where its it hope to increase warehouse efficiency as well, and awaits its Melbourne transport facility to come on line early next year.

Its only underutilised facility is in Brisbane.

Despite this, Mainfreight’s Australian division will look to the traditionally busy pre-Christmas period to save embarrassment on the annual result.

Its logistics operations are at full capacity in most locations, and it expects "efficiencies to improve profitability through the second half of the year.

"We have seen improvement in performance for Domestic Transport and Logistics through September and October, and we expect this to accelerate through to Christmas."

Mainfreight has been busy with Australian property developments this year, and the Melbourne facility is front of mind.

"The consolidation in Epping of our existing north and west Melbourne sites will support our future growth expectations and fulfil our needs in the delivery of our full spectrum of logistics and freight operations," Australian general manager Rodd Morgan says.

The new 20,000 square metre Epping "super-site" provides a 70 per cent increase on its current Somerton site and provides a range of service capabilities, including:

  • substantial hard stand for container loading and unloading
  • 10 dock levelers
  • temperature controlled areas
  • food grade compliance
  • 1,000 sqm cool room facility
  • 2,100sqm mezzanine deck 
  • space for 26,000 pallets.

"Fitted with 7 docks, our new freight design provides premium access for B-Doubles and other large vehicles to control the efficient and effective handling of freight," the company says.

 It will also hold the firm’s national training facility featuring an inbuilt trailer and dock for loading and un-loading exercises.

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