International carrier Freightways is expected to deliver growth at several levels when it reports its full-year to June result today, but analysts expect some drag from its Express Package operation in New Zealand.
Sales revenue is expected to be up 5% to $501.4 million, earnings before interest, tax depreciation and amortisation (ebitda) are expected to be up 4% and reported after-tax profit is expected to be up 22% to $52.9million.
Forsyth Barr broker Lyn Howe said expected Express Package growth, which competes against Courier Post in New Zealand, would be driven upward by pricing moves in early first-half 2016 trading, but held back by there being two fewer trading days.
She said given there had been some adverse margin mix and transitional aviation costs of about $600,000, there could be a 30-basis-point decline to ebitda margins.
"Recent Express Package growth growth has been above trend, but is now slowing," Mrs Howe said.
She said Express Package volume growth was correlated to New Zealand gross domestic growth, noting Freightways was heavily exposed to New Zealand, with a key risk being any economic downturn.
"Organic growth of existing customers is typically a more important driver than [new] customer wins," she said.
