By David Winning
SYDNEY–Courier and information management company Freightways said its annual net profit rose by 7.3%, overcoming challenges that included disruptions caused by Cyclone Gabrielle and economic slowdowns in New Zealand and Australia.
Freightways, which delivers around 50 million items annually through brands such as Post Haste Couriers and Castle Parcels, reported a net profit of 75.3 million New Zealand dollars (US$44.7 million) for the 12 months through June, up from NZ$70.2 million a year ago.
Directors of the company declared a final dividend of 19 New Zealand cents a share, bringing the total payout to 37 NZ cents.
Freightways’s operations were disrupted by Cyclone Gabrielle which flooded large areas of New Zealand’s North Island in February and caused landslips that made some roads impassable. As a result, the company’s Express Package businesses needed to travel further to reach customers, incurring additional costs.
The rapid escalation in interest rates in New Zealand and Australia is taking its toll, with households showing signs of reining in spending and recent data indicating that unemployment is moing higher. New Zealand’s economy contracted 0.1% during the three months through March, following a 0.7% contraction the prior quarter, and remained weak through the second quarter, according to Stats NZ.
“The economic climate has presented challenges over the past six months, and we expect this to continue through FY 2024,” said Freightways. “In NZ, while same-customer volume is lower than in FY 2023, we have secured new customers who are mitigating this impact.”
Still, there is evidence that cost inflation is easing, including fuel costs. Freightways has also looked to keep pace with competitors by raising prices for some services such as parcel delivery from July 1. Recent acquisitions provide a further cushion to earnings.
“In the short term we are cautious about the impact of the economy, particularly in NZ, and we will continue to review the portfolio of services we provide with a view to delivering superior long-term value to shareholders through short, medium and long-term initiatives,” Freightways said. “We will do so whilst monitoring costs closely and acting quickly if we see additional pressure on our margins.”
Write to David Winning at [email protected]
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