A positive outlook, improving trading conditions and revenue and profit growth suggest Mainfreight will improve earnings on its previous financial year.
However, revenue from European and US operations remains under a cloud and New Zealand and Australian operations are expected to be the cornerstone for improvements.
For its first-half trading to September, Mainfreight saw overall revenue gain 1.7%, from $936.3 million to $952.6 million. Asia was up 24%, or $4.4 million, to $$22.8 million but the contributions from the US and Australia were down 3.3% and 1.6% respectively.
Earnings before interest, tax, deprecation and amortisation (ebitda) were up 3.7% to $63.3 million, while after-tax profit was up 7.7% at $29.8 million, which included a one-off $11.96 million settlement from the previous owners of European acquisition Wim Bosman.
Mainfreight declared a 13c interim dividend. Its shares were up slightly at $11.75 after the announcement.
Craigs Investment partners broker Peter McIntyre said the result was ''good'', and better in Australia than many of its competitors there, but the group result incorporated ''vastly different operating results'' from the different geographies.
''New Zealand continues to be the cornerstone of Mainfreight's profitability, with revenue up 7% and ebitda up 14%,'' he said.
Forsyth Barr broker Andrew Rooney said growth in Mainfreight's New Zealand business was accelerating.
''The key underperformer for the group remains Wim Bosman in Europe,'' he said. Ebitda fell 22% to about 4 million ($NZ6.4 million) against last year, as the company was unable to pass on higher overhead costs given the competitive margin backdrop, Mr Rooney said.
Mainfreight's group managing director Don Braid said first-half trading saw ''satisfactory financial performance'' in the core markets of New Zealand, Australia and Asia.
''Disappointingly, this is not the case for the Americas and Europe.''
Mainfreight initiatives in the US should result in better financial performance, particularly in the fourth quarter, to March 2014, but Europe will take longer to improve, because of the economic environment and the competition.
Both Mr McIntyre and Mr Rooney expected trading conditions to improve in the second half, predicting improved earnings compared with a year ago.
• Mainfreight's full year to March results will be reported on May 28.
