European operations for global logistics company Mainfreight still appear to be hampering growth, and second-half trading conditions are expected to weaken.
In a market update yesterday, managing director Don Braid said full-year revenue was expected to be from $1.9 billion to $1.95 billion and after-tax profit, excluding abnormals, from $65 million to $67 million.
''Our first six months in the current financial year saw an improvement in ebitda (earnings before interests, tax, depreciation and amortisation) of 15% over the previous comparable period, excluding our newly acquired European operations,'' Mr Braid said.
As with its half-year report released last November, Mainfreight continues to give financial updates without detailed reports of its European operating, results ''excluding Europe'' being issued. Mr Braid was unable to return calls yesterday.
Mainfreight shares rose from a low of $9.24 in early May to peak at $12.15 in early February, but had since slipped and were down to about $11.25 yesterday.
Craigs Investment Partners broker Paul Valk said the outlook was ''well below expectations'', and he queried why there was not more detail on the European outlook.
''Definitely, Europe and America are not giving them the results they hoped for,'' Mr Valk said. New Zealand earnings were ahead of last year, Australian earnings were well up on last year but slowing, while Asia matched first-half trading.
European returns were better, but slower than expected, while the United States was trading ahead of last year's levels, earnings having eased during the past quarter, however.
For its previous half-year to September report, a poor performance by European operations saw Mainfreight book a decline in profit and before-tax earnings, despite an overall increase of almost 5% in revenue to $NZ936 million.
European operations saw only a 1.4% revenue decline to $NZ190 million, but ebitda plummeted 50.4% to $NZ8.23 million.
Mr Braid said in yesterday's update that while there was improved ebitda, up 15% on last year (excluding European operations), the ebitda for the next six months would be in a lesser range of 7%-9%. Main-freight's full-year results to March will be released at the end of May.
Mainfreight bought Netherlands-based Wim Bosman logistics company and its 14 branches in six European countries in early 2011 for $NZ205 million.
