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Mainfreight posts 12% drop in 9 months profit, sees pickup through year-end

Thursday 18th February 2010

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Mainfreight, the trucking firm whose shares have jumped 60% in the past six months, reported a drop in earnings for the first nine months while noting signs of a pickup heading into the year-end.

Net income fell to $25.96 million in the nine months ended December 31, from $29.4 million a year earlier, the company said in a statement today. Revenue fell 15% to $842 million.

Earnings before interest, tax, depreciation and amortization climbed 14.8% in the third quarter and a similar pace of EBITDA growth is expected in the final three months of the year, given weekly trading results in January and February, the company said. It didn’t give detailed numbers. The shares edged up 0.9% to $5.85 on the NZX.

“Our initiatives of improving margins, managing costs closely and our aggressive sales campaigns for market share growth remain core to our current activities,” managing director Don Braid said in a statement. “It is our belief that the apparent market recovery remains fragile and we retain a cautious approach.”

The company’s New Zealand domestic business, its largest, had EBITDA growth of 21% in the third quarter as revenue climbed 11%.  Braid said the improvement reflected increased market share and margin management in logistics and domestic freight, trends which have continued in the fourth quarter.

New Zealand international earnings rose 20%. Australian operations were “satisfactory and ahead of last year,” the company said, without giving details.Australian domestic earnings soared 85% in the third quarter and international jumped 43%. In the US, trading “has remained difficult.”

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