Financial Result for the Three Months Ended June 2005 (Unaudited)
The Mainfreight Group is pleased to report a net profit after taxation of $4.229 million for the first three months of the 2006 financial year. This represents a $4.441 million increase when compared to the same period last year.
Excluding divested Owens business units, total sales grew $12.947 million, an increase of 6.5%.
Consolidated revenues (sales) declined to $213.409 million from $222.657 million as a result of divested business revenues of $22.195 million.
This much improved Group performance reflects comments provided in the annual report and at our annual meeting held in late July. All divisions again contributed positively to this increase.
Highlights continue to include the improving performance of the Australian Domestic operations and increasing profit contributions from our Australian and US International business units. Further, our Owens investments continue to improve their contributions to our consolidated result with an improvement of $3.687 million at EBIT level to $1.279 million.
The New Zealand Domestic and International operations continue to provide strength and profitability as expected.
Divisional performances include relevant Owens businesses and are quoted in New Zealand dollars.
New Zealand Domestic
EBIT improved to $4.591 million, an increase of 43.6% largely as a result of Owens Transport improvements and the ongoing strength of our core domestic activities.
Total domestic revenues declined to $65.131 million from $66.533 million, due solely to Owens Transport eliminating unprofitable revenue streams. Revenues within “Mainfreight only” businesses continued their increase by a further 5.7%.
New Zealand International
EBIT improved to $0.489 million from $0.016 million. Contributions to this improvement have come from Owens Coolair and Mainfreight International.
Revenues declined overall by $2.161 million as seasonal perishable volumes impact.
EBIT improved to breakeven levels compared to a deficit last year of $1.388 million.
Revenues continue their improvement with an increase of 13.9% to $23.142 million. Excluding the contribution from Owens Transport Pty Ltd, revenues increased by 25.4%.
We continue to see positive results from our Australian domestic operations as the second quarter progresses and expect our target of profitability for the full year to be achieved.
EBIT continues its improvement increasing to $1.928 million, up 124.4%.
Revenues are improved by 15.8% to $70.053 million, largely due to the increased contributions of the Owens Project and Pacific Island freight businesses of Pan Orient Pty Ltd.
It is this business which has gained a number of “Project” related contracts, including the Goro-Nickel contract in Noumea.
As advised at our Annual Meeting, the benefits of the Goro-nickel contract will begin to flow during our second quarter.
Project activity has a fixed term duration and revenues will fluctuate accordingly.
Core international activity continues to improve profit contributions and we expect this to continue for the remainder of the year.
EBIT continues also to improve from $0.101 million to $0.537 million. Revenues grew 23.9% to $21.459 million. Again our improvements in this region are satisfactory and we expect further increasing returns throughout the year.
Satisfactory returns were received from our associate businesses, contributing $0.530 million to our net surplus.
Group Operating Cash Flow
Operating cash flows were $10.160 million compared to $0.904 million last year.
The favourable increase is due to increased profitability and last year’s working capital requirements of the Owens Group investment.
Investing activity costs were $21.728 million, $13.738 million of this related to the completion of the Owens Group investment. $7.506 million was for capital expenditure. $5.274 million related to property development in New Zealand.
This satisfactory quarterly result reflects our improvements in the Owens Group investment, our Australian domestic activities and the ongoing strength of our Group.
This strong performance is continuing through the second quarter.
For further information, please contact:
Group Managing Director