Freightways Group (FRW) H1 2025 earnings summary

Executive summary

• Revenue grew 6.7% year-over-year to NZD 662.1 million, with EBITDA/EBITA up 6.5% to NZD 86 million and NPAT up 9.5% to NZD 44.7 million, despite challenging New Zealand market conditions.

• Express Package & Business Mail and Information Management divisions delivered revenue and profit growth, with strong operational improvements and efficiency gains.

• Market share gains and pricing improvements offset volume declines in New Zealand; Australia showed robust growth, especially in Allied Express.

• Interim dividend increased to NZD 0.19 per share, up from NZD 0.18 in prior years, with a record date of 7 March 2025 and payment on 1 April 2025.

• Disciplined capital management and ongoing M&A strategy, with investments in automation, infrastructure, and digital capabilities.

Financial highlights

• Group operating revenue rose 6.7% to NZD 662.1 million; EBITA up 6.5% to NZD 86 million; NPAT up 9.5% to NZD 44.7 million.

• Express Package & Business Mail revenue up 5.8% to NZD 547.2 million; EBITA up 12% to NZD 80 million; margin improved by 80bp to 14.6%.

• Information Management & Waste Renewal revenue up 11.3% to NZD 117.6 million; EBITA flat at NZD 15.5 million due to one-off costs.

• Net cash inflow from operations was NZD 76.3 million, up from NZD 58.3 million year-over-year.

• Interim dividend declared at NZD 0.19 per share, totaling approximately NZD 34 million.

Outlook and guidance

• Cautiously optimistic for New Zealand in H2, expecting slow organic growth; Australian market remains more buoyant.

• Focus on restoring margins in FY25 and FY26 as organic growth and market share gains are realized.

• Full-year CapEx guidance at NZD 35 million, focused on operational tools, IT, and mechanisation.

• Project Evolve OpEx spend of NZD 5 million in FY25 and FY26, not included in CapEx.

• Additional Medical Waste revenue delayed to Q4; anticipation of a significant Victorian contract.