Australia remains a happy Mainfreight hunting ground


New Zealand firm's Australian operations aid its global yearly growth

Australia remains a happy Mainfreight hunting ground
Kiwi firm Mainfreight sees year-on-year growth in Australia

 

Mainfreight has largely navigated challenging economic conditions to post a full-year global financial improvement, including in its substantial Australian operations.

The New Zealand firm reports sales revenues for the year ending March 31, 2020 at NZ$3.09 billion, and net profit of $147.98 million.

That represents a revenue increase of NZ$141.31 million, or 4.8 per cent, and net profit increase of 4.2 per cent.

The caveat is the activity to March 31 precedes the height of the Covid-19 global pandemic restrictions but the company says it is in a strong position to withstand global impacts on its business.

"Mainfreight is pleased to announce our full year financial; a satisfactory improvement on the prior year," it says.

"We are pleased with this result, and the contribution and development of all our businesses across the world.

"This financial performance provides us with the confidence to now tackle the ongoing supply chain disruptions brought about by the COVID-19 pandemic, and the depressed economic conditions we expect to encounter."

Mainfreight’s Australian arm, which comprises about a quarter of the company’s turnover, sees revenue increase A$46.63 million, or 6.6 per cent, on the previous year, to $756.80 million

Its earnings before interest, taxes, depreciation and amortisation (EBITDA) of A$61.80 million (pre-NZ IFRS 16) represents an increase of A$6.42 million or 11.6 per cent.

"A strong recovery during our second half was led by pleasing progress from our Warehousing and Transport divisions," Mainfreight explains

"Warehousing increased their footprint by an additional 18,400m2, with utilisation of 87 per cent at year end.

"The majority of this new volume has found its way into our domestic Transport freight network.

"Transport’s regional expansion has seen improving profitability from branches alongside an increasing number of new customers.

"Our Air & Ocean operations have continued on steadily, albeit not developing similar levels of air freight activity as the other regions."

Beyond those results, the company explains the partial lockdown in Australia saw freight volumes remain at "more-or-less normal" trading levels.


How Mainfreight forecasted its Australian operations during Covid-19, here


"Sales revenues for the seven-week period increased 13 per cent compared to the same period in the prior year, and profit before tax improved to A$6 million, up by A$4 million.

"Strong sales enquiry continues and gains in market share see results improving through May.

"We expect this to continue through the 2021 financial year."

The company also outlines its global measures to minimise the impacts of Covid-19 on its bottom line, which it says remain in place as it transitions through the crisis.

  • hiring freeze in place, usual annual wage and salary review deferred
  • elimination of casual labour, and holiday leave utilised where appropriate
  • all unnecessary discretionary expenditure reduced
  • a 50 per cent reduction in managing director’s salary and other directors’ fees
  • the New Zealand Government’s wage subsidy was accessed in early April, but has been returned
  • capital expenditure of $120 million has been deferred.

 

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