Freightways expects record earnings, despite mail moves
Freightways expects to report record full-year earnings for 2013, it has told the market.
However, the express package and information management company's earnings forecast for next year is below expectations.
The company expected its full-year net profit after tax (NPAT) for the year to June to be about $38 million, up 6 per cent on the previous year.
Freightways said it expected to announce a record earnings before interest, tax and amortisation (ebita) result of about $65m, an increase of 5 per cent compared with 2012.
However, its forecast for 2014 is not meeting market expectations.
First NZ Capital head of institutional equities James Lee said Freightways' 2014 full-year forecast was lower than expected and as a result, its share price had dropped back.
The company's shares were trading down 3.1 per cent at $4.37 at 11am yesterday.
Analysts had expected Freightways to forecast a 7 per cent increase in 2014 full-year ebita, and a 10 per cent increase in NPAT.
However, the company said it expected to increase ebita in 2014 by 5 per cent and NPAT by 6 per cent.
Lee said the weaker earnings forecast for next year was due to the slow recovery of the New Zealand economy.
"They are a maturing business. It's hard for a business like that to grow by 10 per cent each year."
Freightways said it expected to be operating in a positive but slow growth environment for the foreseeable future.
Managing director Dean Bracewell said he was happy with the record result for the 2013 financial year, especially considering the changes to the traditional mail systems.
There had been a decline in the company's letters business DX Mail, and some decline in traditional retail volumes, he said.
"More mail is going directly to households rather than shops."
Employee commitment and the high quality of business had helped offset those changes, however, and led to the record earnings, Bracewell said. Freightways will release its full-year results to June 30 on August 12.
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