Mainfreight has released their Full Year Results to 31 March 2024. Overall profits before tax are down 33% and NZ drops by 12%.

Result Summary: Revenue $4.72 billion Down 17%, Profit before tax $395.4 million Down 33%. Net profit before abnormals $277.9 million Down 35%. Adjusted for foreign exchange impact, group revenue is down 18%, and profit before tax is down 33%. 

This result is in line with our expectations as freight volumes and international sea and air freight rates normalise from the peaks experienced during 2022/2023. We are satisfied with the momentum and progress in New Zealand and Australia, but remain disappointed with our performances in Asia, USA and Europe, where our market share remains small. 

Freight Volume Analysis – FY24 v FY23. Full year Total Air freight kilos up 4.5%

Total Sea freight TEUS up 4.7%. Total domestic Transport tonnes down 6.2%

Total Warehouse orders picked up 12.3%

We have grown a larger business, attracted more customers and increased our operational capacity. However, our ability to convert this to more meaningful long term profitability during this past year has been disappointing. No matter the prior year’s record performance, we should have performed better.

Divisional Performance (figures in local currencies). New Zealand (NZ$) Revenue NZ$1.12 billion Down 12.5%. Profit Before Tax NZ$148.7 million Down 12.2%. 

We continue to have a resilient business in New Zealand. Whilst some customer freight volumes declined post their peak, we continued to grow market share and further extend our capability across New Zealand.

New Warehousing capacity has been filled with four new sites currently in plan and for construction, providing capacity for growth.

Three new Transport sites under construction in Auckland will improve our capability and efficiency, two will be operational mid-2024. Our new Auckland rail-served inland port and international container cross-dock operation has opened post year-end.

Our Transport business is a significant user of rail across the length and breadth of New Zealand. The current fiasco surrounding the future of both the rail ferry services across the Cook Strait and rail services south of the Waikato are unsettling. The loss of rail services between the North and South Island would see Mainfreight add 5,700 additional truck and trailer journeys per annum on the road, putting significant pressure on the already fragile roading network. New Zealand’s roading infrastructure will not cope in the absence of rail.

Air & Ocean revenues, while reduced, have been boosted by market share gains. This has seen increased volumes across air and sea freight. Current trading across all New Zealand businesses is satisfactory and is in line with the prior year.

Outlook - As was well signaled, we embarked on this financial year well-aware of the challenges and the expected deterioration in international freight rates and domestic freight tonnage. It has been and remains a demanding operating environment when compared to the prior two years. We expected to do better.

Despite these challenges, the peak freight congestion of 2022/2023 has provided a period of significant growth, new customers, and improvements for our business. The results of 2024 surpass the results of 2021 by a significant quantum. 

Supply chain management has emerged as a critical strategic decision among our customers. They now seek greater resilience and are diversifying their supply chains. Our established network across 27 countries offers good capability across the varying supply chain requirements. We continue to attract new customers across our network and are confident of ongoing growth.

We continue to invest in land and buildings, including leased facilities where required. The total capital expenditure is NZ$255 million through to the end of 2025. Our network expansion will continue to be carefully managed as we look to improving returns rather than expansion for the sake of it. Trading post results is satisfactory, and we remain confident of our medium to long term growth opportunities.