Mainfreight's first-half trading and profit result to September is expected to be hugely boosted by its European acquisition earlier this year, but trading for the global logistics operator might weaken during the second half of the year.
Its half-year result is due tomorrow and Forsyth Barr broker Peter Young is forecasting earnings before interest and tax (ebit) up 76% at $48.4 million and after-tax profit up 73% at $28.5 million.
"[European acquisition] Wim Bosman delivered ahead of expectations and we're confident that the first-half result will be a solid performance," Mr Young said.
Craigs Investment Partners broker Peter McIntyre said the market appeared to be expecting "a special result", with shares in the past five days traded up 43c to a resilient $10.20 this week.
He is forecasting earnings before interest, tax, depreciation and amortisation up 59% at $63.7 million and after-tax profit up more than 70% at $29.4 million.
Mr McIntyre said operating momentum was expected to be underpinned by Australia, New Zealand and Asian business for the end of the second quarter to September, with market share gains and natural volume growth.
However, it is the impact of seasonal softening in Europe and subdued performances in the US that will have most effect on the result.
In the US, port activity, truck use, fuel costs and international airfreight demand paint a "mixed outlook", with volumes generally subdued, with the USA-Asia-Pacific routes "particularly weak" when leading into the busy Christmas period, Mr McIntyre said.
Mr Young said while New Zealand and Australian operations could show some weakening, because of increased competition for freight volume and rates, the pair made up only a small percentage of ebit. He expected a "relatively subdued" contribution from division CaroTrans' Asia and US route, because of volatility in that sector.
In late-May Mainfreight reported it had lifted its full-year to March net profit, before abnormals, to a record $47.2 million, with improved performances from all divisions across all countries.
"Recovery in world freight volumes across most trade lanes assisted this improvement. The past year had been a "defining period" for the company, which was in a position to take advantage of the scale offered by its growing global presence, Mainfreight said at the time.
Operating revenue rose for the year to $1.34 billion from $1.13 billion the year before, with net profit before non-recurring expenses up to $47.2 million from $38.3 million.
Reported net profit fell to $25.7 million from $36.4 million, due to abnormal costs including a non-recurring non-cash deferred tax liability for tax depreciation and one-off costs associated with the acquisition of the Wim Bosman Group.
• Earlier this year Mainfreight bought the Netherlands-based Wim Bosman Group, with 14 branches in six European countries. The initial purchase price was €110 million, about $NZ205 million, at the time.
