Freightways first in big reporting week

Air New Zealand’s half-year report on Thursday is expected to be a record, with profit before tax...
Air New Zealand’s half-year report on Thursday is expected to be a record, with profit before tax picked at more than $400 million. Photo from ODT files.
Bellwether courier company Freightways leads the busiest week of the current NZX reporting season, during which 28 companies of 50 are scheduled to deliver their half-year reports.

The season started 12 days ago and runs through to March 30.

Freightways, Rubicon and Cavalier Corp are scheduled to report today.

Freightways is expected to post ‘‘subdued'' earnings growth, when it delivers its half-year report today.

Sales revenue for its six months to December was expected to be up 6%, from $241.8 million a year ago to $256.4 million, earnings before interest, tax depreciation and amortisation up 7% from $48.6 million to $51.9million and reported after-tax profit up 5%, from $26.3million to $27.5 million, Forsyth Barr broker Suzanne Kinnaird said.

‘‘We expect like-for-like performance to remain robust, driven predominantly by accretive deal making in [Freightway's] Information management division,'' Mrs Kinnaird said; having noted there were four fewer trading days than during the previous half-year period.

A key driver for Freightways was New Zealand's economic growth, she said.

‘‘Organic growth of existing customers is typically a more important driver than customer wins,'' she said.

She said Freightways had a strong track record of adding value value through accretive merger and acquisition (M&A) activity, particularly in its information management division.

While Freightways had shown strong capital discipline, Mrs Kinnaird noted some risk in acquisition.

‘‘In order to get a foothold in a new market it may need to pay up with limited ability to extract synergies,'' Mrs Kinnaird said. She picked the interim dividend would increase from last year's 12c per share to 13c.

On Thursday, Air New Zealand was expected to deliver a record half-year report, having said in October it was on target to exceed $400 million in profit before tax, Mrs Kinnaird said.

‘‘Key issues'' to be looked for in the result would be yield outlook given increasing competition, cost management and how Air New Zealand would tackle capital management against its capital expenditure.

Sales revenue is expected to up 8% to $2.59 billion, Ebitda up 44% to $775 million and reported after-tax profit up 135%, to $313 million.

Vector, reporting on Friday, was expected to produce a modest more than 4.2% increase in Ebitda, following regulatory price increases, which should offset declines in its gas wholesaling division, Mrs Kinnaird said.

After-tax profit was expected to be up 8.1%, from $89 million a year ago to $96 million, with a modest 3.3% increase in interim dividend to 7.75c, Mrs Kinnaird said.

EBOS Group, reporting on Wednesday, was predicted to deliver strong earnings growth, underpinning a forecast 13% rise in after-tax profit to $61 million, Mrs Kinnaird said.

‘‘We expect a strong result from both [divisions] healthcare and animal care, underpinned by strong sales growth across all market channels and margin expansion,'' she said.

She expected sales revenue to increase by more than 5%, from $3.27 billion a year ago to $3.11 billion, with Ebit up more than 11.8%, to $88.5 million.

-simon.hartley@odt.co.nz


Reporting this week

Today: Freightways, Rubicon, Cavalier
Tuesday: Mighty River Power, Tourism Holdings, Heartland Bank
Wednesday: Ebos, Genesis Energy, NZX, Meridian Energy, Summerset Group, NZ Refining, NZ Windfarms, PGG Wrightson, SLI Systems
Thursday: Air NZ, Scales Corp, Wynyard Group, Airwork Holdings, Team Talk
Friday: Vector, Sky TV, Intueri, Vital Healthcare, T&G Global, Veritas, Mercer, Delegat Group


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