Mainfreight shares drop as Europe earnings slump hits first half

Mainfreight, the global transport and logistics group, posted a 4.6% drop in first-half profit as an earnings slump in Europe offsets gains in all of its other markets.

It kept the first-half dividend payment unchanged.

Mainfreight shares (NZX: MFT) dropped 1.44% to $10.25 just before 11am.

Profit was $27.7 million, or 27.9 cents a share, in the six months ended September 30, from $29.1 million, or 29.45 cents, a year earlier, the Auckland-based company says in a statement. Sales climbed 4.9% to $936 million.

Earnings before interest, tax, depreciation and amortisation in Europe tumbled 50.4% to 5.26 million euros as margins shrank in the face of "poor warehouse utilisation and activity, and poorly performing transport operations in Belgium and France".

"We maintain our confidence in the long-term benefits of our European acquisition although we are disappointed with the financial performance over the last six months," managing director Don Braid says in a statement.

Mainfreight acquired Netherlands-based Wim Bosman Group for 110 million euros plus earn outs last year to secure its foothold in Europe. Sales from the region fell just 1.4% to 122.4 million euros while costs including labour increased.

By contrast in its biggest market of New Zealand, ebitda climbed 8.7% to $24 million in the first half as sales rose 5.9% to $228 million. Australian earnings gained 22% to $A13 million on sales growth of 13.3% to $A209 million.

In Asia, ebitda rose 19.2% to $US1.37 million ,though in-country sales fell 4.2% and European trade "remains weak."

US earnings rose 18.7% to $US8.12 million as sales gained 10% to $182 million, mainly reflecting a better performance from its Mainfreight USA business. Its Carotrans business lifted sales by 3.6% to about $US69 million, with ebitda little changed from a year earlier.

The company will pay a first-half dividend of 12 cents a share on December 14, unchanged from a year ago.

"We are confident of maintaining this growth and profitability and expect to see improving returns from our European interests," Mr Braid says.

The shares closed last night at $10.40, after starting the year at $9.90. The stock is rated "outperform" based on six recommendations compiled by Reuters, with a price target of $10.67.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7069 0.0072 1.03%
AUD 0.9396 -0.0003 -0.03%
EUR 0.6430 0.0063 0.99%
GBP 0.5375 0.0033 0.62%
HKD 5.4823 0.0553 1.02%
JPY 74.2480 0.1200 0.16%

Commods

Commodity Price Change Time
Gold Index 1320.8 1.300 2016-07-26T00:
Oil Brent 45.2 0.100 2016-07-26T00:
Oil Nymex 42.9 -0.210 2016-07-26T00:
Silver Index 19.7 0.030 2016-07-26T00:

Indices

Symbol Open High Last %
NZX 50 7310.4 7310.4 7310.4 -0.04%
NASDAQ 5095.6 5122.3 5097.6 0.24%
DAX 10199.7 10275.4 10198.2 0.49%
DJI 18497.4 18522.5 18493.1 -0.10%
FTSE 6710.1 6744.8 6710.1 0.21%
HKSE 21890.9 22300.5 21993.4 0.62%
NI225 16526.1 16642.6 16383.0 1.03%
ASX 5537.5 5564.6 5537.5 0.28%