For the three months to June, Mainfreight group managing director Don Braid said business performances in New Zealand, Australia, Asia and the United States had continued to deliver improved revenue growth and profitability and all four regions "performed well".
"It is expected that the poor performance from our European operations will continue through the first half of our financial year, until the European summer holiday season is behind us, and new customer revenue is trading fully," he said in a statement.
While revenue from sales was up 3.4% to $465.02 million, profit after tax declined 15.2%, from $14.64 million last year to $12.41 million. Earnings before interest, tax, depreciation and amortisation (ebitda) fell 10.4% to $28.78 million.
Mainfreight shares were down almost 2%, at $9.10, after the announcement.
Craigs Investment Partners broker Peter McIntyre said Mainfreight had signalled the likelihood of problems ahead in Europe at its annual meeting in late July.
It yesterday revealed European ebitda was down 53.5% for the quarter.
"Europe was always going to be a struggle for them in this economic climate.
"But Mainfreight's management have a good track record of bedding-in new acquisitions. This one is just going to take more time," he said.
Forsyth Barr broker Peter Young said the market was showing some concern over the outlook for Wim Bosman and was beginning to question the merits of the $NZ205 million acquisition.
"But we believe the acquisition will be positive for Mainfreight over the medium term and has strengthened its global position," Mr Young said.
Mainfreight had already taken positive action to secure new logistics customers, scheduled for late-2013, and had restructured its Belgian freight forwarding business from three hubs to two.
Mr Braid said the European ebitda decline of 53.5% was further hampered by poor results from Mainfreight's Belgian transport operations.
"Our European operations continued to experience disappointing revenues and margins due to lost logistics customers," he said.
However, Mr Braid said aside from the European performance, trading remained broadly in line with expectations, particularly improvements in the Australian and US operations.
Mainfreight is moving from quarterly to half-year reporting.
Its half-year to September 2012 result is to be delivered in November and the full-year to March 2013 is due in late May.
