Mainfreight profit lifted thanks to rail restoration through Kaikōura

Wednesday, 14 November 2018

Conditions have improved for Mainfreight drivers and customers as the road and rail links through Kaikōura have been fixed.

The repaired earthquake-damaged Kaikōura railroad has helped Mainfreight post its latest record profit as it was able to place more freight on trains.

Managing director Don Braid said the restored rail link had helped alleviate congestion on the roads and enabled the company to get back to more normal delivery times.

It meant there were fewer vehicles on the roads and cut out double handling at depots, especially Blenheim, which had required employing more people at different times, Braid said.

The profit was for the half-year to the end of September, but Braid said freight levels during October and November had been very strong beyond the normal pre-Christmas increase.

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The Kaikōura effect was reflected by a rise in earnings before interest and tax expenses for New Zealand operations up 18 per cent to $45 million, on revenue up 8.3 per cent to $343m.

Freight volumes during the six months to September were at record levels.

Braid paid tribute to the efforts of Mainfreight staff, which he said were 'tremendous'.

A big jump for Mainfreight came from its US business, with earnings before interest and tax up 30 per cent to about $14.7m and revenue up 16 per cent to about $349m.

European earnings before interest and tax were also well ahead by 23 per cent to $38m on revenue up 12 per cent to $303m.

Revenue and profit from operations in Asia jumped highest on a percentage basis, but off a lower level than in other regions.

The overall profit after expenses and tax for the six months was $55.7m on total revenue of $1.4 billion.

Shareholders will receive a dividend of 22 cents a share, which is 3c more than last year's interim dividend, taking $26m of the total profit. The balance of the profit is kept as retained earnings for future capital expenditure including property developments.

The shares are trading at $28.75 a share, giving a high share price to earnings ratio of 26. The gross dividend yield was 2.1 per cent.