Latest news with #Mainfreight
RNZ News
3 days ago
- Business
- RNZ News
Mainfreight full year net profit up nearly a third on previous year to $274.3 million
Mainfreight's net profit for the 12 months ended March was $274.3 million. Photo: Supplied Transport heavyweight Mainfreight full year net profit is up by nearly a third on the year earlier, with the Australian business the largest generator of revenue and profits. "We felt in certain parts of the business we could have been better," Mainfreight managing director Don Braid said, noting the underlying profit was slightly down on the year earlier by 3 percent. Key numbers for the 12 months ended March compared with a year ago: Braid said the outlook for the current year was uncertain, though the pause in the imposition of United States tariffs had seen an increase in bookings and volumes, along with an increase in sea freight costs. He said space availability was becoming tight with American businesses rushing to get products into warehouses and retail shelves. While that was seeing revenue rise, he said the outlook was uncertain. "It's all very well to have a small surge in volumes, but that is not of that much interest. What we're interested in is long term certainty, so that we have a steady trade," Braid said, adding that the uncertainty was affecting all global markets. He said the near-term focus for Mainfreight was to look after its customers. "The beauty of being in 27 different countries is that if the trade lanes change, if companies begin to think of of other countries other than the USA, then from an international shipping perspective we're able to assist their customers. "But at the same time it's business as usual across supply chains in the five regions we're in and we're working hard to win market share and provide an improving performance." Sales revenue increased in all five regions Mainfreight operated and its across transport, warehousing and air and ocean divisions. However, Asia, the Americas and New Zealand saw profits decline. Braid said economic uncertainty continued to affect the New Zealand market. "I think at the small end of town, whilst we might have seen an increase in dairy and the kiwifruit harvest was pretty healthy ... at the other end of the spectrum, I think people are still seeing it as a tough environment. "We're lucky enough to have won more market share then we've lost and we continue to build the business." Mainfreight was continuing to invest in new facilities in preparation for when the New Zealand economy began to improve, he said. "However, the likelihood of slower economic growth, coupled with the considerable investments made in the past year, particularly in New Zealand, will result in a more cautionary approach to property development and capital expenditure." However, he said there had been a small improvement in domestic freight movements over the past couple of weeks. "How that looks as we get into the rest of the year, we're uncertain and I think that's our biggest problem is that we just don't have any certainty about how the economy will perform over the next six to 12 months." Mainfreight would also pay staff bonuses of $30.5m to be shared with team members in branches who had contributed satisfactory profits in Australia, Asia and Europe regions. "Unfortunately, this year's performance will result in our people in New Zealand and the Americas regions foregoing bonuses as a consequence of contributing less profit than the year prior," Braid said. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
NZ Herald
13-05-2025
- Business
- NZ Herald
Capital Markets: New Zealand companies face uncertainty amid US tariffs and global slowdown
Its economic forecast for New Zealand saw a reduction in real GDP growth in 2025 to 1.4%, down 0.5 percentage points. Growth for the Asia Pacific region – seen as strongly exposed to tariff shock – is expected to slow to around 3.9% and 4% in 2025 and 2026, respectively, down from 4.6% in 2024 and 4.4% in 2025, the IMF said. The uncertainty made forecasting difficult during the most recent reporting season, although company outlook statements did come in positive overall, according to Forsyth Barr's quantitative scorecard of the results. 'Trump tariffs and a major capital raise clouded the December earnings season, making it feel worse than it actually was,' Forsyth Barr analysts Aaron Ibbotson and Matthew Leach said in their research note. 'Our overall scorecard yielded a net negative result, but only modestly so. Cost-out programmes, demand as weak as expected and a surprising net positive outlook are our main takeaways. 'Earnings are still being downgraded as the recovery is pushed out at least another six months, but the pace of downgrades has slowed meaningfully,' they said. The February 2025 reporting season, dominated by the property and aged care sectors, showed earnings per share (EPS) growth was below expectations – weighed down by the likes of Fletcher Building and Meridian Energy reporting large losses compared with the previous corresponding period. Overall revenue growth was slightly better than expected though. Of the 31 NZX-listed companies that reported results, 11 reported ahead of Forsyth Barr's EPS expectations, four were in line and 16 were below. 'Downgrades continue to feature with net negative revisions across the board from revenue to the bottom line for both FY26 and FY27,' the analysts noted. The bright spot was the a2 Milk Company, which increased its first-half net profit by 7.6% to $91.7 million and recorded an 18.8% post result one-day share price gain. The biggest miss came from Spark NZ, which reported a 78% decrease in first-half net profit and a 17.8% post-result one-day share price decline. Forsyth Barr noted that both companies have a limited read across the New Zealand economy, whereas Fletcher was more hitched. 'We upgraded our estimates for cyclical bellwether Fletcher Building for the first time in over two years. It felt bleak but was in line with our low expectations.' One company result to look out for later this month is Mainfreight, a major logistics and transport company that is also seen as an economic bellwether. The company reports its first-half results on May 29. Earlier this month, Mainfreight said it expected its profit before tax and sales revenues for the March 2025 year to be above market consensus expectations of $375m and $5.1 billion, respectively. 'However, we are seeing a reduction in forward sea freight bookings for May on the Transpacific trade route, China to US,' the company noted. The stock staged a decent recovery in the aftermath of the update. Geoff Zame of Craigs Investment Partners said in a daily newsletter that Mainfreight's update calmed market concerns about a tariff-induced slowdown in global growth impacting that company's earnings. At the macro level, uncertainty around tariffs remains a theme, Milford Asset Management portfolio manager Mark Riggall said in a recent note to clients. 'Just three short months ago, investor expectations were of ongoing US outperformance, both economically and from the stock market. Now, expectations are rapidly changing as fading US growth, policy headwinds (partly from tariffs), AI [artificial intelligence] fatigue and stronger stimulus impulses overseas (notably the German fiscal package) have upended the outlook for various asset markets. 'Looking ahead, uncertainty around tariffs and other government policy in the US lowers our conviction levels. But a policy-induced slowdown can also be mitigated by a policy reversal, an outcome that is likely at some point in the future.' Duncan Bridgeman is managing editor of NZME Business, including the Business Herald and BusinessDesk.
RNZ News
13-05-2025
- Business
- RNZ News
NZ exporters relieved after US - China reach temporary trade agreement
economy world politics 38 minutes ago New Zealand exporters are breathing a small sigh of relief, after the US and China agreed to a temporary halt on the tariffs they had put on imports from each other's country. Mainfreight's Managing Director Don Braid spoke to Charlotte Cook.
RNZ News
01-05-2025
- Business
- RNZ News
Mainfreight expects to beat market exceptions with release of year results nearing
Mainfreight says export trade into the US from Australia, New Zealand and Southeast Asia is largely unaffected by tariffs at this stage. Photo: RNZ / Samuel Rillstone Mainfreight expects its full year underlying profit and revenue will beat market exceptions , though warns forward sea freight shippings are down. The global transportation company said full year profit before tax was expected to exceed the market consensus of $375 million with sales revenue of $5.1 billion. "Trading during April within our Air & Ocean division has been in line with prior years , albeit disrupted due to Easter and ANZAC holidays," it said in a statement to the market. "However, we are seeing a reduction in forward sea freight bookings for May on the Transpacific trade route, China to USA." It said the Transpacific trade lane represented about 10 percent of Mainfreight's total Air & Ocean freight volume. "Alongside these reductions, a number of customers wishing to continue to ship from China to the USA are placing freight bookings on hold until a more defined outcome is achieved on tariff negotiations. "It is our expectation that tonnage reductions on the Transpacific trade lane are inevitable while tariff negotiations continue to provide uncertainty for importers and exporters alike." It said export trade into the United States from Australia, New Zealand and Southeast Asia was largely unaffected at this stage . "Many customers in these regions have a "wait and see" approach, with normal business conditions being adopted during the 90-day tariff suspension period." However, it said Mainfreight's operations in five regions, including 27 countries, provided ongoing opportunity should there be a reduction in US trade. It said Mainfreight's US based business represented about 7 percent of its underlying profit for the year just ended. "Whilst we remain dissatisfied with this performance and return, the USA market continues to provide growth opportunity," it said adding that all three US divisions of Domestic Transportation, Warehousing and Air & Ocean were in position to take advantage internal and external supply chain opportunities. "(These opportunities) are likely to eventuate once trade negotiations are completed and some form of normality returns to USA trade." The company's full year result ended 31 March and will be released on Thursday 29 May. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Time of India
21-04-2025
- Business
- Time of India
Which New Zealand companies are facing the heat after US tariff war
Global markets have been facing the brutal aftermath of the newly implemented US tariffs, and the tremors are being keenly felt on the New Zealand bourse. While the direct financial hit on some Kiwi companies might not be a big deal for now, the broader impact on investor sentiment and global trade dynamics is casting a shadow over the share markets. Market analysts have pinpointed several NZX-listed entities as being particularly sensitive to the unfolding trade tensions. These include Fisher & Paykel Healthcare, which makes medical equipment; Mainfreight, a company that ships goods around the world; Infratil, which invests in power plants and airports; and Tourism Holdings, which rents out campervans. The last named company has seen the biggest drop in its share price. Tourism Holdings shares have fallen by over 20% in just a month after US President Donald Trump announced the new tariffs. The company says these new US taxes are making things tougher for them and making people less confident about spending money on travel. Live Events Jeremy Sullivan, of Hamilton Hindin Greene said that many people, especially those in Europe, are cancelling or not booking trips to the US because of this uncertainty and a feeling that the US is becoming less friendly. This isn't just about the extra cost; it's about people being unsure about travelling there at all. Mainfreight has also seen its share price drop significantly, by almost 15%. Sullivan attributes this to people worrying that there will be less shipping happening around the world if countries start putting up more trade barriers. However, Greg Smith, Head of Retail at Devon Funds, thinks that Mainfreight might not be as badly affected as some fear. He pointed out that the US only makes up a small part of Mainfreight's earnings (about 8%). Most of their business comes from Australia and New Zealand (75%), with some from Europe (15%). Fisher & Paykel Healthcare's share price has also gone down a bit (about 3.7%), but it's been going up and down. One reason why they might not be hit as hard is that they make a lot of their products in Mexico (around 60% of their sales). Because of a special agreement between the US, Mexico, and Canada, these goods might not face the new tariffs. Smith thinks the company might even make more of their products in Mexico and also in New Zealand, which only has a smaller 10% tax. Sullivan mentioned that about 45% of their production is in a city in Mexico called Tijuana. As long as their trade follows the rules of the North American free-trade agreement, they should be okay. Plus, they can also ship more from New Zealand if they need to. Infratil's situation is a bit different. Their share price first went down but then came back up after they told investors what was happening. Sullivan thinks this might be linked to how people feel about things like Artificial Intelligence. He warned that if the US trade changes hurt big tech companies, it could also affect other areas like data centres, which Infratil invests in. Also, Infratil has solar farms in the US that use parts from China, and these parts could face the new tariffs. Sullivan says it's hard for companies to know exactly how much these changes will cost them because things are changing all the time. This uncertainty can make businesses delay making decisions, which can slow down the economy. Greg Smith, says that the US only buys a small amount of goods from New Zealand (about $9 billion worth). So, New Zealand isn't as dependent on the US as it is on other countries, like China. He thinks that the drop in share prices might be more about people feeling worried than about a real big financial hit. A 10% tax on $9 billion is $900 million, which he thinks is something New Zealand can handle. What does this all mean? Basically, when the US makes changes to who they trade with and how much tax they charge, it can create uncertainty around the world. This makes investors nervous, and the value of shares in companies, even in New Zealand, can go up and down. While some New Zealand companies that sell things to or operate in the US might face some challenges, the overall impact on New Zealand might not be as severe as the initial reactions suggest.
