Mainfreight keeps on truckin' through slump

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Mainfreight has been hit hard by tough trading conditions in the September half year but its tight squeeze on operating costs means it is poised for recovery, analysts say.

The transport firm yesterday posted a fall in net profit before abnormals of 29.3 percent to $12.18 million for the half year.

Revenue decreased 14.3 percent to $535.8m while earnings before interest, tax, depreciation and amortisation fell 17 percent to $29m.

While most of 2009 was a tough time to be in the freight business, said analysts, the company's ability to reduce costs over that period had helped it to preserve margins.

NZ Funds dividend yield portfolio manager Nick Dravitzki said there had been some improvement in the second quarter as ebitda was only 6 percent down on the same time last year, a significant improvement from the first quarter's almost 30 percent fall.

As a freight-forwarding firm, Mainfreight was "plugged in" to every sector of the economy, and had nowhere to hide when economic conditions deteriorated, he said.

But management had skilfully dealt with the rapid deterioration in conditions, cutting operating expenses by 14 percent in the first half.

- © Fairfax NZ News