Europe woes hit Mainfreight profit
Tough trading conditions and customer losses in Europe have dragged down Mainfreight's first quarter profit to $12.4 million, a fall of 15 per cent year-on-year.
The freight company said its financial performance improved in all regions other than Europe, where performance was hit by trading conditions and customer losses at Dutch-based firm Wim Bosman which it bought last year.
Earnings before interest, tax, depreciation and amortisation in Mainfreight's Europe division plunged 54 per cent to 3m euros (NZ$4.5m), while revenue fell 4.8 per cent to 62.8m euros.
Mainfreight's total sales for the three months ending June lifted 3.4 per cent to $465m, and ebitda fell 10.4 per cent year on year to $28.8m.
The European result was further hampered by poor results from its Belgium transport operations, the company said.
"Whilst new customers have begun trading within our logistics operations, and improvements have been implemented across our Belgian transport business, the European summer holiday period has negated the benefits of these changes. September will see this seasonal effect improve."
Mainfreight said it expected the poor performance in Europe would weigh on the first half of its financial year, until the European summer was behind it and new customer revenue was on stream.
"We remain confident of the long-term benefits our European entry has provided, including the opportunities that are coming from global customers and the interaction between our trading entities across the world.
Mainfreight said that results for the period excluding the European division saw sales improve 9.7 per cent, and ebitda improve 17.9 per cent to $23.8 million.
Ebitda for the company's New Zealand division increased 12.2 per cent to $11.3m for the first quarter, with sales up 7.4 per cent to $111.9m.
Its Australian and United States divisions performed strongly, growing ebitda by 19.6 per cent to A$5.1m, and 34.2 per cent to US$4.1m, respectively.
Improved export volumes in Asia boosted sales there by 16.9 per cent to US$8.6m and ebitda increased 30.2 per cent US$.0.63m.
Mainfreight shares were trading at $9.15 each this morning - little changed from their $9.20 open price. Over the past year, the company's shareprice has ranged between $9.12 and $10.53.
- © Fairfax NZ News