Transport Business: Freightways Results Show Weak Demand
August 18th, 2010
It is testament to a listed company when it can report profit dropped by a third and its shares still rise. Freightways, whose courier and package delivery brands include NZ Couriers, Post Haste Couriers, SUB60, Kiwi Express and DX Mail, posted a 33% decline in full-year earnings, partly reflecting weaker sales and also the impact of tax changes for depreciation which has whacked most companies at the bottom line. The company didn’t give much guidance but it is clear the benefits of a slowly improving economy will be gradual. Managing Director Dean Bracewell says Freightways “will continue to manage its cost base and seek to improve service quality.”
- – -NOT A SUBSCRIBER? – - – - – - – - – - – - – - – - – - – - – - – - – - –
NEW ZEALAND TRANSPORT INTELLIGENCE BRIEFING
NZ’s freight, transport, distribution and infrastructure news authority. Takes a critical look at understanding and analysing policy and initiatives from Govt and industry. Covers road transport, shipping, rail, air, ports, fuel taxes, supply chain sustainability, security, dangerous goods transportation and warehousing This analysis of news and trends is vital information for all those involved in the import and export sectors. Published every Thursday 46 issues per year.
To subscribe – http://www.nztransport-logistics.co.nz/home/special-introductory-offer
- – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – -
The company did note a pickup in volumes in the second half in its express package business, which makes up 78% of earnings. Overall volumes “have improved in recent months” to about match levels seen in 2009, though the recovery isn’t yet broadbased. To add value to its existing businesses, Freightways has launched Pass the Parcel, a delivery service aimed at users of the TradeMe website, and Stuck, a web-based delivery firm that specializes in “hard to deliver express freight jobs.”
Potential and existing customers are doing it tough but the transport sector per se has held up remarkably well. The BNZ – BusinessNZ Performance of Services Index for July shows while the services industry has slowed to a “snail’s pace” transport and storage showed the strongest results, with a reading of 56.6 on a scale where 50 marks the difference between expansion and contraction. Shares of Freightways have shed a fifth of their value this year as a slower-than-expected economic recovery reduced volumes of express parcels for existing customers.
Copyright © Media Information Ltd
NZ Transport Intelligence Briefing
Amalgamated Dairies
Strait Shipping