Trading Update
An update on the trading performance of Freightways Limited (‘Freightways’) for the nine months ended 31 March 2009 is provided below. These results are drawn from unaudited management accounts.
For the nine months ended 31 March 2009, Freightways’ revenue totalled $258 million, generating Net Profit After Tax (‘NPAT’) of $24 million. Compared to the prior corresponding period, this performance represents an increase in revenue of 9% and delivers an increase in NPAT of 4%.
Overall, Freightways has not experienced any deterioration in its operating performance since its previous market announcement in respect of its half year result to 31 December 2008. It is however continuing to experience the same trends in its core business described at that time of fluctuating volumes and lower activity from some existing customers. Some of the negative impacts associated with these trends have been offset by quality market share growth, the execution of strategies to contain costs wherever possible, a more stable environment relating to the cost of fuel and the continued positive contribution from those businesses acquired by Freightways during 2008.
Consistent with its half year performance, Freightways’ core express package & business mail division has delivered a result that is below the prior corresponding period. The strong market positioning of its respective brands, the experience and capability of its people, the attractive features of its industry, and the resilience and flexibility of its business model have again combined to deliver what is a sound result in a tough economic environment.
Freightways’ information management division is continuing to deliver year on year earnings growth in line with expectations, both in New Zealand and Australia. This division is not showing any signs of being affected by the current economic downturn in its data and document storage businesses. In its document destruction businesses it is experiencing some lower activity and lower returns due to the closure of some customers and reduced demand and pricing for recycled paper.
The recent capital management initiatives announced by Freightways, including the successful placement of $45 million of new equity and the planned Share Purchase Plan offer of up to $5 million will be used to further strengthen Freightways’ balance sheet.
Results for the nine (9) months ended 31 March 2009 (unaudited):
| Nine months ended: | March 2009 | March 2008 | % variance |
|---|---|---|---|
| $000 | $000 | ||
| Revenue | 258,252 | 237,159 | 9% |
| EBITDA | 51,573 | 49,677 | 4% |
| EBITA | 44,545 | 43,921 | 1% |
| NPAT | 23,971 | 23,029 | 4% |
These latest results continue the positive historic performance of Freightways, as shown in the following graphs in relation to its last ten years’ financial performance (NB. Historic EBITA amounts for the years ended 30 June 1999 to 2003 have been presented on a pro-forma basis consistent with the Freightways Statement and Prospectus issued in August 2003).
Freightways Operating Revenue
Freightways EBITA
Outlook
Freightways core express package & business mail division is expected to perform soundly overall. This may however mean that near term performance continues to track below the prior year. Fluctuating month on month volumes, such as have been experienced in the March quarter, continue to make it difficult to accurately forecast near term performance.
Freightways’ information management division is expected to continue its positive development. It will however experience a near term margin reduction associated with it recently having invested in increased capacity to accommodate volume growth in its document and data storage businesses and also as a result of lower overall prices associated with the sale of its recycled paper.
Freightways will continue to be influenced by the current economic downturn. Medium to longer term, Freightways is exceptionally well positioned to reap the benefits of any improvement in the marketplace.
No change to Freightways’ current dividend policy of paying out 75% of NPATA is contemplated in the near term, however the final dividend for the year ended 30 June 2009 will be determined once the full year’s results have been finalised.
For further information please contact:
DEAN BRACEWELL
Managing Director
Freightways Limited
Ph: (09) 571 9670
Fax: (09) 571 9671
