Ann: QUARTER: MFT: Mainfreight Result Nine Months

• Release Date: 14/02/12 10:46
• Summary: QUARTER: MFT: Mainfreight Result Nine Months to December 2011
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MFT
14/02/2012 08:46
QUARTER

REL: 0846 HRS Mainfreight Limited

QUARTER: MFT: Mainfreight Result Nine Months to December 2011

Financial result for the nine months ended December 2011 (Unaudited)

Mainfreight is pleased to report a record net surplus after taxation and
abnormals of $46.75 million for the first nine months of the 2012 financial
year; an increase of 34.9% on the previous year's result of $34.65 million.
Excluding abnormals ($0.51 million after tax) the increase was 36.4%.

EBITDA performance was also at a record level for a nine month result
breaking $100 million for the first time, an increase of 50.9% to $101.02
million.

This is despite a poorer-than-expected third quarter performance where
freight volumes and returns only matched the prior year levels.  December
trading, in particular, was below our expectations.

Total revenue (sales) increased 35.3% to $1.37 billion from $1.01 billion in
the comparative period last year.  (Excluding foreign exchange effects, this
represents an increase of 38.2%).

Excluding Wim Bosman Group results, Mainfreight's revenues improved by 3.9%
(adjusted for foreign exchange, the increase is 6.8%), and EBITDA results
were up 17.9% (excluding foreign exchange, 19.7%).

Whilst early third quarter trading replicated the trends of the first half of
the year, December volumes across all divisions only matched prior year
levels.

Trading into the fourth quarter has begun positively and we are confident of
further improvements and increased trading through to our year end.  In
addition, market share gains have been made across most business units
providing increased confidence in trading levels through 2012 and 2013.

Divisional Performance

New Zealand Domestic (NZ$)
New Zealand Domestic EBITDA increased 14.1% to NZ$35.04 million; an increase
of NZ$4.32 million from the prior year.

Sales revenues were up 9.0% at NZ$239.16 million as market share was gained
and food and beverage related products increased freight volumes.  December
trading however only matched that of the year prior.

Logistics volumes, stock holdings and revenues have seen significant
improvement throughout the third quarter.  This growth has seen additional
leased facilities being commissioned to cover expansion of trade through
2012.

New Zealand International (NZ$)
EBITDA continues to improve in our New Zealand International division, up
11.3% to NZ$4.37 million from NZ$3.92 million in the year prior.

Sales revenues continued to rise; up 9.9% to NZ$100.28 million compared to
the same period last year.  Import volumes dominated the increase, with only
perishable export volumes contracting when compared to the year prior.

An early Chinese New Year saw volumes from Asia decrease during January.
Early February trading continues the first nine-month trend.

Australian Domestic (AU$)
EBITDA continued to increase, up 37.8% to AU$14.27 million, an improvement of
AU$3.92 million over the year prior.

Sales revenues were up by AU$17.32 million to AU$150.34 million, which is a
13.0% increase on the same period last year.  Continuing market share gain
and steady trading from our established customers have contributed.
Operating margins are up as we improve our linehaul networks and find better
utilisation for our warehousing facilities.

Australia International (AU$)
Revenues for this division again declined, falling 5.7% to AU$137.93 million,
a decrease of AU$8.35 million.

EBITDA was down 3.3% or AU$0.16million, to AU$4.48 million when compared with
the same period in the year prior.

A disappointing "peak season" from Asia and intense competition in the
shipping sector saw freight rates decline, inhibiting revenues and margin
performance.

A number of sizeable new accounts have been gained, with most commencing
trade from March onwards.

United States of America (US$)
Our overall performance throughout the United States continues to improve,
again assisted by the uplift in profitability in our Mainfreight-branded
operations.

Total sales revenues increased US$20.36 million or 8.9% to US$249.78 million.

EBITDA for the combined USA operations was up 37.2% to US$10.52 million.

Divisional performance has Mainfreight USA's revenues up 14.8% to US$149.60
million compared to US$130.31 million in the prior year.  EBITDA is at
US$4.16 million, up from US$0.91 million in the year prior.

Improvement has been seen in both the Domestic and International divisions.
With freight revenues split 57.6% to 42.4% respectively, the strongest
revenue increases were seen in the Domestic business, improving 22.6%, as
against growth of 11.3% in International.

CaroTrans
CaroTrans, our wholesale NVOCC network, continued to struggle to find
satisfactory  improvement over the prior period's results.

Revenues improved just 1.1% to US$100.17 million and EBITDA performance
declined 5.9% to US$6.36 million as margin levels are impacted with less
export and import LCL trade.

We continue to look for improved performance in container utilisation and a
stronger focus on developing our import volumes.

Asia International (US$)
Sales revenues increased marginally on the year prior, up 3.1% to US$21.96
million after improving 15.0% over the first half.  Lack of "peak season"
export freight volume and lower than expected ocean freight rates to all
parts of the globe contributed to this reduced increase.

EBITDA decreased 11.1% to US$1.72 million, a drop of US$0.21 million from
US$1.93 million.

Reduced shipping rates, volumes, excess capacity and increased operating
costs from our network expansion all contributed.

Trading into the fourth quarter has started slowly with the early Chinese New
Year affecting January shipping and airfreight volumes.

Network expansion and more in-country sales continue to be priorities as we
look to expand our footprint in the region, particularly to assist our
European freight trade.

Europe (Euro EUR)
Wim Bosman Group produced revenues of EUR181.79 million and EBITDA of
EUR12.65 million.

Whilst contributing satisfactorily to the Group result, trading in the second
and third quarters was below our expectations.

Poor performance from our Belgium Transport operations, our Air & Sea
International business, and reduced utilisation in our 's-Heerenberg
Logistics facilities were all contributing factors.

Our Eastern European divisions continue to perform above expectations albeit
that they each have a smaller market presence when compared to our Benelux
operations.

During these past two quarters, an amount of restructuring has taken place to
improve performance in our Belgium Forwarding and Air & Sea operations.  In
addition to this, market share has been restored, with good customer gains
improving our Logistics utilisation in 's-Heerenberg, and also likely to
provide additional Transport opportunities throughout the region.  The
majority of these customer gains are contracted to begin during our second
quarter of the 2013 financial year (June/July 2012).

We remain satisfied with our investment and are excited by the growth
opportunities Wim Bosman Group presents, irrespective of the European
economic crisis.

We expect to have the final audited accounts for the Wim Bosman Group full
financial year (January to December 2011) by the end of March 2012, which
will determine the final earn-out calculation and payment due to the vendor,
if any.

Outlook
Despite a lower than expected third quarter, we remain satisfied with this
record nine month result.  Market share gains and the continuing levels of
profitability being experienced in all divisions early in this fourth
quarter, provide confidence for a satisfactory year end result.

More importantly, we remain well positioned for further growth during the
2012 and 2013 trading years.

For further information, please contact Don Braid, Group Managing Director,
phone +64 9 259 5503, +64 274 961 637 or email [email protected].
End CA:00219490 For:MFT    Type:QUARTER    Time:2012-02-14 08:46:21