Freightways half year profit up 31pc

By NZPA

Tuesday 18th February 2003

Freight forwarding company Freightways has driven its first half profit to $9 million, a 31 percent rise on the previous half year to December.

No dividend was declared.

Freightways put the increase down to a strong performance in the courier/express freight market, a developing position in the business mail sector, and stepped growth in the information management market.

The company said total operating revenue of $101 million was 7 percent higher than the previous corresponding period, and earnings before interest, tax and amortisation (ebita) were $16.8 million, up 21 percent.

This exceeded Freightways' average ebita compound growth rate of 18 percent over the past three years.

"The ongoing ability of Freightways to grow earnings at consistently higher rates than revenue demonstrates Freightways' ability to leverage off its operating scale and increase the utilisation of its infrastructure capacity," said managing director Dean Bracewell.

He said Freightways' performance was particularly pleasing given the change in ownership to ABN AMRO Holding NV during the period.

Freightways said its courier/express freight and business mail operations had the highest growth, with a 9 percent growth in revenues to $93.8 million, and 15 percent ebita growth to $16.9 million.

Its New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60 and Security Express brands had found organic growth from existing customers, new business and margin improvement.

Its business mail brand, DX Mail, has continued to improve its performance in the deregulated postal market and generating revenue beyond initial expectations.

The smaller information management and logistics operations earned revenues of $7.1 million for the half year, 9 percent below the previous year, but ebita of $900,000 was 53 percent higher.

Freightways' recent decision to sell logistics firm Stocklink to print company Wickliffe Ltd had included provisions to continue using the courier and freight services.

Operational cash (before interest & tax) increased from $14.7 million to $18.4 million, and the company said it had a positive outlook based on high earnings growth and cash generation.

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