Mainfreight lifts net profit by 27pc, raises final dividend

Freight forwarder and distributor Mainfreight said its net profit rose by 27.2 per cent to $262.4 million, driven by sales growth across all the five regions in which it operates.

Sales revenues for the March 31 year increased 14.5 per cent to $3.54 billion.

Mainfreight announced a final dividend of 45c, compared with 34c last year, bringing the total to 75c – up 27.1 per cent over the prior year.

The company also lifted the bonus it pays to employees.

“We are pleased with this result, particularly in light of initial supply chain disruptions in the early part of the financial year, where lockdowns in response to the global pandemic saw revenues decline,” Mainfreight said.

New Zealand was the worst affected by lockdowns, with April 2020 weekly revenues reduced by 40 per cent.

The company said it had prepared at the outset of the Covid-19 pandemic for the likelihood of very difficult trading conditions and a tough economic environment.

“We had strength in our balance sheet, good cash flows and our decentralised leadership structure, which allowed our people the freedom to respond and adjust to the pandemic restrictions,” it said.

All five regions experienced improved sales growth through a mix of organic and market share increases, as customers, both new and existing, experienced strong consumer demand.

Operating cash flows were $376.28m, up from $300.80m in the prior year.

Mainfreight increased its discretionary profit bonus to $43.88m, up 60.8 per cent from $27.29m for the year prior.

It also increased its Christmas bonus for 2020, up from $5.35m to $11.02m.

Mainfreight said it was a significant result in light of the “tumultuous time” in the world’s history.

Businesses outside New Zealand now contribute over 76 per cent of its sales revenues and over 63 per cent of net profit.

Looking ahead, uncertainty would remain.

“Service levels need to improve, and with heavily congested supply chains affecting the world’s freight lanes, we have much to achieve on behalf of our customers,” the company said.

“It is our view that the heavily inflated shipping and air cargo rates will continue to be a feature of global trade while freight demand is exceeding air and sea capacity,” it said.

For the first seven weeks of trading into the 2022 financial year, Mainfreight had seen similar activity levels as those of the past six months.

“This gives us confidence that we will deliver further improved results in the near term.”

Shares in Mainfreight last traded at $74.73, up $1.73 or 2.4 per cent.

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