A poor performance by European operations saw global
logistics company Mainfreight book a decline in profit and
before-tax earnings, despite an overall increase of almost 5%
in revenue to $936 million.
New Zealand and Australian operations, with sales revenues up
respectively almost 6% at $NZ228.29 million and more than 13%
at $A209.42 million ($NZ266.7 million), bested the revenue
contribution of Asia's 4.2% decline to $US14.75 million
($NZ18.03 million) and United States' 10% improvement to
Mainfreight's earnings before interest, tax, depreciation and
amortisation (ebitda) declined 5.1% from last year's record
$64.37 million to $61.06 million, while after-tax profit fell
4.6%, from $29.08 million a year ago to $27.74 million.
While Europe saw only a 1.4% decline in revenue to 122.36
million ($NZ190 million), ebitda plummeted by 50.4% to 5.26
million, Mainfreight's half-year unaudited result to the end
of September said.
Mainfreight repeatedly gave versions of what its financial
result could have been by "excluding Europe" - revenue
contribution from there was $NZ190 million - and offered
revised figures. It said "excluding Europe" revenue improved
9.5%, while ebitda "excluding Europe" would have been up 15%
to $52.74 million - the latter percentage more than double
the actual booked.
Craigs Investment Partners broker Peter McIntyre said the
Europe, ebitda and the after-tax profit results were all
"Europe is obviously a problem and was even weaker than we
thought," Mr McIntyre said.
On the subject of why Mainfreight repeatedly offered up
"excluding Europe" analysis, Mr McIntyre said it was
management reinforcing the problems faced in Europe.
"Mainfreight has now got enough diversification in its
business to have one divisional segment underperforming
without it being an outright handbrake," Mr McIntyre said.
However, while Mainfreight management maintained "confidence
in the long-term benefits" of the Bosman acquisition in
Europe, Mr McIntyre said investors may not share the same
levels of confidence and "would be watching Europe closely,
for some quarters to come".
Mainfreight purchased Netherlands-based Wim Bosman logistics
company and its 14 branches in six European countries in
early 2011 for $NZ205 million, later retaining a $17 million
Mr McIntyre said the Bosman purchase filled in an obvious
"geographical picture" for Mainfreight, but, with hindsight,
a later purchase may have been better.
Mainfreight replicated last year's half-year 12c per share
dividend, while its shares were down 15c at $10.25 following