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 and Business Mail delivered strong results, with revenue up 5.8–6% and EBITDA/EBITA up 12%, driven by pricing, market share gains, and operational improvements.

• Information Management and Waste Renewal revenue rose 11.3%, but earnings were flat due to one-off costs and margin contraction.

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

• Interim dividend increased to 19c per share, up from 18c in prior years, totaling about NZD 34 million, payable 1 April 2025.

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.

• EBITDA/EBITA margin for Express Package division increased by 80 basis points to 14.6%.

• Same-customer volumes in NZ Express Package declined 3.9% year-over-year, but average pricing per item rose 4.2% to NZD 8.86.

• Allied Express volumes in Australia grew 8–9%, benefiting from automation and improved economic conditions.

• Medical waste revenue up 20%, with further growth expected pending a large Victorian tender.

Outlook and guidance

• Cautiously optimistic for New Zealand activity in H2, expecting slow, incremental 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 potentially adding NZD 1–4 million annually over five years.