Ann: QUARTER: MFT: Mainfreight Result Three Month

• Release Date: 09/08/12 10:30
• Summary: QUARTER: MFT: Mainfreight Result Three Months to June 2012
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MFT
09/08/2012 08:30
QUARTER

REL: 0830 HRS Mainfreight Limited

QUARTER: MFT: Mainfreight Result Three Months to June 2012

MAINFREIGHT LIMITED

Financial result for the three months ended 30 June 2012 (Unaudited)

Commentary
Mainfreight reports a net surplus after taxation of $12.41 million for the
first three months of the 2013 financial year; a decrease of 15.2% on the
previous year's result of $14.64 million (before non-recurring costs).

EBITDA totalled $28.78 million, a decrease of 10.4% when compared to the
prior year.

Total revenue (sales) increased by 3.4% to $465.02 million (excluding foreign
exchange effects, this represents an increase of 6.7%).

For comparison purposes, results for the period excluding the European
division saw sales improve 9.7% (excluding foreign exchange, 10.9%), and
EBITDA improve 17.9% to $23.76 million (excluding foreign exchange, 19.0%).

Financial performance improved in all regions other than in our European
operations where, as signalled, our first quarter performance is impacted by
trading conditions and customer losses post-acquisition.  It is expected that
the poor performance from our European operations will continue through the
first half of our financial year until the European summer holiday season is
behind us, and new customer revenue is trading fully.

Business performance in New Zealand, Australia, Asia and the United States
continues to deliver improved revenue growth and profitability.  All four
regions performed well in this period.

Divisional Performance (figures in local currencies)
As previously signalled, it is our intention to now report divisional
performance by country rather than by division.

New Zealand (NZ$)
New Zealand EBITDA improved 12.2% to NZ$11.29 million, compared to the same
period last year, with sales revenues increasing 7.4% to NZ$111.94 million.
Both divisions, Domestic and Air & Ocean (previously known as International),
showed improved results for the reporting period continuing the trends of the
past.

Trading in July and August reflects similar levels of growth.

Australia (AU$)
Our Australian business units continue to find improvement, particularly our
Domestic operations.  EBITDA improved 19.6% to AU$5.11 million with sales
improving 12.4% to AU$97.47 million.

Our Domestic operations are the standout performer in this region, where
sales growth remains strong, exceeding 20%.  In our Air & Ocean operations,
we are seeing small improvements from the year prior and whilst this is
satisfactory, stronger sales and EBITDA performance is expected.

Trading during July and August continues the trend in both operations.

Asia (US$)
Improved trading across most branch locations has seen revenue up 16.9% on
the same period last year, to US$8.63 million, and an EBITDA increase of
30.2% to US$0.63 million.

Export growth in both sea and air freight dominates these improvements.
Import volumes remain weak for us, and an area for improvement.

We continue to focus on stronger in-country sales to find more growth to and
from this important market.  European trade lane growth has not yet reached
anticipated levels.

United States of America (US$)
Strong sales activity in Mainfreight USA's Air & Ocean division has seen
total US revenues improve 12.1% to US$91.62 million when compared to the same
period last year.  EBITDA performance improved a satisfactory 34.2% to
US$4.08 million, again as a result of good growth from our Mainfreight
operations.

Our wholesale NVOCC operator, CaroTrans, has seen small improvements in sales
and EBITDA performance, and we expect further progress as strong sales
activity extracts more market share.

Trading through July and August has seen these trends continue across both
business units.

Europe (Euro EUR)
As we signalled at our recent annual meeting of shareholders, our European
operations continued to experience disappointing revenues and margins due to
lost logistics customers.

Revenues declined 4.8% from the year prior to EUR62.84 million and EBITDA
reduced by 53.5%% to EUR3.09 million.  This EBITDA result was further
hampered by poor results from our Belgium transport operations.

Whilst new customers have begun trading within our logistics operations, and
improvements have been implemented across our Belgian transport business, the
European summer holiday period has negated the benefits of these changes.
September will see this seasonal effect improve.

We remain confident of the long-term benefits our European entry has
provided, including the opportunities that are coming from global customers
and the interaction between our trading entities across the world.  Our
strategy of strengthening the links between our operations in all countries
provides competitive advantage and opportunity for much stronger growth than
we have been capable of in the past.

Group Operating Cash Flows
Operating cash flows were NZ$22.86 million, a decrease of NZ$1.42 million
reflecting the reduced profitability.

Capital Expenditure totalled NZ$13.03 million, of which NZ$9.01 million
related to property development.

Outlook
Aside from our European performance, trading remains broadly in line with
expectations, particularly the improvement shown by our Australian and USA
operations.

We continue to be mindful of trading conditions around the world, and are
managing our cost structures accordingly and vigorously pursuing sales
growth.

Market share gain is the focus across all of our markets as we look for
stronger revenue generation, particularly in our Air & Ocean sector.

Mainfreight will be moving to half-yearly reporting going forward, making
this our last quarter report.  Future reporting dates are as follows:
o Half year to 30 September 2012 will be reported on 13 November 2012;
o Full year to 31 March 2013 will be reported on 29 May 2013.

For further information, please contact Don Braid, Group Managing Director,
telephone +64 9 259 5503, +64 274 961 637 or email [email protected].
End CA:00225759 For:MFT    Type:QUARTER    Time:2012-08-09 08:30:19