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Mainfreight first-half profit rises 9.5%

By Paul McBeth

Friday 21st November 2008

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Mainfreight, New Zealand’s largest trucking company, posted a 9.5% rise in operating profit after tax on the back of strong domestic sales volumes and rapid growth in the US market.

Profit rose to $17.2 million in the six months ended September 30, from $15.7 million a year earlier, the company said in a statement. The year-earlier result excludes a one-time gain from the sale of LEP and Pan Orient that lifted net income to $77 million. Sales jumped 63% to $625 million, reflecting a surge in US revenue.

“A continuing strong market presence has resulted in an increase in revenue,” the company said in a statement. “In the current environment we are adopting a cautious, prudent approach to costs and capital expenditure.”

The company’s American businesses, Mainfreight USA and Carotrans, lifted revenue in the US sales by 254% to $218.8 million. A quarter of the company’s sales came from the New Zealand domestic market, which increased 15% to $153.5 million. The company is scheduled to start a new air-freight facility in Auckland this month and said it is already attracting interest from customers.

The company said its Asian market share “remains small in light of what is available.” Sales in Asian increased 29% to $11.9 million, while EBITDA decreased 14% to $1.4 million.

Mainfreight’s share price fell 1.6% to $4.25. Its price has slumped almost 40% over the last 12 months.

The company raised its first-half dividend to 8.5 cents per share from 8 cents.

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